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MERCHANDISE STANDARDS Budget Control, Payouts, & Percent's.

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Presentation on theme: "MERCHANDISE STANDARDS Budget Control, Payouts, & Percent's."— Presentation transcript:

1 MERCHANDISE STANDARDS Budget Control, Payouts, & Percent's

2 BUDGET CONTROL Budget amount is set at 8.5% of last year’s total revenue All Locations - Expense Summary Merch Expense for : Parts & other Expense for : November Over/Under Merch Budget: December Remaining Merch Budget: $ 0.00 $ 0.00 $ -47, $ 117,467.45

3 WHY DO WE TRACK PAYOUTS/BUDGETS? Under Budget  Under Ordering  Payouts are too low  Impact Guest satisfaction

4 WHY DO WE TRACK PAYOUTS/BUDGETS? Over Budget  High redemption ticket payout  High Instant Win payout  Over ordering or unused stock

5 Redemption Ticket Payout Fast play games, such as Cyclone, payout should be between the range of 25% to 30%  Play Value Games, such as Basket Ball or Ice Ball, should be 20% to 25%  There will be games that adjustments are not possible without decreasing play time or raising the price- If you have questions on these instances, consult your supervisors  Ticket value is calculated at.01 cent a ticket

6 Understanding Cost of Sales Cost of Sales -The actual cost of prizes redeemed as a percentage of redemption game revenue. Example: A game room that generated $10,000 in redemption game revenue and gave away $1,600 in prizes has a 16% cost of sales. $1,600/$10,000 = 16% Mark Up -The percentage you mark up the redemption merchandise. Example: A 3 times mark up on $1 cost item would be worth 300 tickets in a redemption center. 3 x 1.00 = 300 Tickets Cost Per Ticket -The value of each ticket or point coming out of your games. Example: If there was a 3 times mark up then cost per ticket is pennies/300 tickets =.0033 cost per ticket Payout -The value of the tickets a game pays out. Example: Let’s look at 1 game that pays out 7 tickets for every 1 play and each play costs $.25 and let’s assume a 3 times markup. With this information we can calculate a 18.68% payout and the following process can be applied to an entire game room. 7 tickets x $.0033 cost per ticket = $.0231 value of ticket per play $.0231 value per play/$.25 cost per player = 9% payout.

7 RETAIL V. ACTUAL The actual cost of prizes redeemed as a percentage of redemption game revenue. Retail Value advantage -Baby Bottle Pops Study - $29.16 a case - $22.68 a case Purchased 14 Cases Saved- $ Case Study: Cherry Air Heads -$7.02 per box -$5.18 per box -$4.75 per box – save $2.27

8 DCS REPORTS- Best practices? Rnk ID Game Name Total Plays Cred Bon Cty Svc Coll. Credits Bonus Courtesy Passp ort Time Ticket s Coins Avg Prc PO% Ice Ball # $ % Ice Ball # $ % Ice Ball # $ % Jack's Hi # $ % Jack's Hi # $ % Jack's Hi # $ % Jack's Hi # $ % Jumpin Jackpot # $ % Jumpin Jackpot # $ % Knock Out Punch # $ % Knock Out Punch # $ % Milk Jug Toss # $ % Milk Jug Toss $ % Monster Drop # $ % Monster Drop # $ % Monster Drop Extreme L $ % Monster Drop Extreme R $ % Monster Hunt Junior $

9 INSTANT WIN PAY OUT  Instant win pay out should target 25% throw based off the retail value of the prize  Formulating Throw % = price of prize X pieces given out / Revenue of game. Case Study Angry Birds -$6.00 to $ $4.00 ($2.00 Saved) Eclaw -Hello Kitty – 3.50 each Multiplied by 34 pc given out = $119 in cost out. Divide that by the $467 Game Rev for a 25% throw.

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11 Merchandise Throw Percentage EquipmentProductCost Per UnitTicket PayoutRevenue TotalCOG SoldThrow % $

12 1. 2. PB 3AB$7.0014$398.00$ % PB 2Monster Germies$1.2552$267.00$ % PB 1Knobby Balls$1.0017$59.00$ % USING THE DATA: EquipmentProductCost Per UnitTicket Payout Revenue TotalCOG SoldThrow % Big OneBalls$6.0012$605.00$ % 3. Bling KingMisc Watches$4.006$140.00$ % Bling KingFox$6.0015$354.00$ %

13 OTHER FACTORS Proper Ticket Pricing-  Where do you find item prices?  Why would this affect budget & payout? Perceived Value  Why would perceived value affect budget & payout?

14 GAME PRICING Open Discussion

15 QUESTIONS?


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