A systematic approach to sales dictates the need to form target sets of positions that must be present in certain outlets. Such sets are called assortment matrices (Minimum Must List - the minimum list of mandatory items).
Why is MML needed?
Let's look at an example. In MML there are two types of toothpaste:
A 100 grams toothpaste at a price of 100 soums
A 200 grams toothpaste at a price of 170 soums
When selling 2 toothpaste of 100 gr each, we will earn 200 soums for 200 gr. When selling 1 toothpaste at 200 grams for 170, we will earn 15% less.
MML is the top 20% of the most profitable positions in the portfolio. Usually there are about 20 of them, even if the portfolio consists of 200, 300 and even 1000 positions.
The presence of MML allows the Sales team to focus on selling high-margin positions, and not on “locomotives” (SKUs with low margins that are sold in large volumes) and illiquid assets. Thus, the company begins to earn more.
If the MML is not executed or formed incorrectly, then sales and net profit do not grow, even if the company sells a lot. Also, the lack of MML leads to chaos at the outlets, and the marginal product itself is actually not in stores.
A 100 grams toothpaste at a price of 100 soums
A 200 grams toothpaste at a price of 170 soums
When selling 2 toothpaste of 100 gr each, we will earn 200 soums for 200 gr. When selling 1 toothpaste at 200 grams for 170, we will earn 15% less.
MML is the top 20% of the most profitable positions in the portfolio. Usually there are about 20 of them, even if the portfolio consists of 200, 300 and even 1000 positions.
The presence of MML allows the Sales team to focus on selling high-margin positions, and not on “locomotives” (SKUs with low margins that are sold in large volumes) and illiquid assets. Thus, the company begins to earn more.
If the MML is not executed or formed incorrectly, then sales and net profit do not grow, even if the company sells a lot. Also, the lack of MML leads to chaos at the outlets, and the marginal product itself is actually not in stores.
How to develop MML?
MML should be made depending on the format of outlets - it will be different for a stall and a hypermarket. Usually they proceed from the area of shelf space and the method of trade, for example, self-service or trade from behind the counter.
One of the main criteria for getting into the MML matrix is the marginality of the product, because it is more profitable to implement it. That is why far from the cheapest products get into the matrix.
Consider the matrix implementation process:
- Determining the format of outlets according to the client base. For each of them it is necessary to develop its own matrix
- Analysis of matrices created for each format
- Development of a motivation system for retail outlet staff
- Development of a plan to increase MML
After each month, you need to analyze the results and adjust the matrix, create a plan for the next month.
- Determining the format of outlets according to the client base. For each of them it is necessary to develop its own matrix
- Analysis of matrices created for each format
- Development of a motivation system for retail outlet staff
- Development of a plan to increase MML
After each month, you need to analyze the results and adjust the matrix, create a plan for the next month.
Who is responsible for MML?
The one who is interested in the growth of the company's profit is responsible for the creation and control of the matrix. It can be a supervisor, a commercial director, or the owner or brand itself.
How to control?
Without specialized software, MML is controlled through a sales report. But you will see the result only in the report for the past period and you will not be able to influence it.
Automation programs allow the sales representative to do self-control. He will be able to influence the inclusion of MML in the order here and now.
Programs help automate the MML implementation process. A sales representative, starting to fill out an application, sees the necessary positions and includes positions with the highest margin in each order - this has a positive effect on the financial result.
If you are looking for a solution for implementing MML matrices, take a look at Smartup, a program for automating distribution processes. In addition to the implementation and control of MML matrices, Smartgp has a wide range of capabilities - from managing a sales team and trade marketing to managing inventory, eliminating delinquency or frozen capital in illiquid positions.
Automation programs allow the sales representative to do self-control. He will be able to influence the inclusion of MML in the order here and now.
Programs help automate the MML implementation process. A sales representative, starting to fill out an application, sees the necessary positions and includes positions with the highest margin in each order - this has a positive effect on the financial result.
If you are looking for a solution for implementing MML matrices, take a look at Smartup, a program for automating distribution processes. In addition to the implementation and control of MML matrices, Smartgp has a wide range of capabilities - from managing a sales team and trade marketing to managing inventory, eliminating delinquency or frozen capital in illiquid positions.
To increase your profits and your sales reps, sign up for a product tour and we'll show you how Smartup can streamline your business processes.
