If you are a retailer, you don’t just watch your pennies. You watch your tenths, or even hundredths, of a penny.
Why? Because retailers have some of the lowest profit margins in business, running anywhere from 0.5% to 7.5%. Lowering your costs by—even by fractions of a penny on each sale—impacts your bottom line in big ways.
That’s why so many retailers are shaving costs by outsourcing their IT help desk.
Do The Math On Outsourcing Retail IT Support. We Did.
As an outsourced IT help desk provider, we’ve done the math.
In fact, we do this math all the time for our potential clients and current clients alike.
Come along as we demonstrate how you, as a retailer, will likely reduce costs and improve your margins by outsourcing your retail IT support.
Let’s start with your sales.
*Note all numbers presented below use industry averages.
Let’s assume you are a large grocery retailer with 100 stores and an average net profit of 2% or $0.57 per dollar. Here are your monthly numbers per store:
Monthly Sales Per Store
Number of sales transactions: 29,403
Dollar value of these sales transactions: $1,733,333
Average sale: $58.95
Average net profit: 2% or $0.57
Total monthly transactions for all 100 stores: 2,940,345 (# of sales transactions x 100 stores)
Now, let’s look at your monthly IT support costs.
Monthly Cost, In-House IT Help Desk
IT support, all 100 stores: $175,000
Divide by total monthly transactions: 2,940,345 =
Monthly cost: $0.0595 (or 0.10%) of every transaction value of $58.95
Now, let’s see how a savings of $20,000 potentially impacts your net profit per transaction.
Monthly Cost, Outsourced IT Help Desk
Help Desk Support, all 100 stores: $155,000
Divide by total monthly transactions: 2,940,345 =
Monthly cost: $0.0527 (or 0.09%) of every transaction
As you can see, outsourcing your IT help desk saves you one cent per transaction, increasing your net profit from $0.57 to $0.58.
Saving a penny per transaction? When you get into midsize and enterprise-level retail, those numbers get very big, very quickly.
Adding just one penny of net profit to each transaction boosts our example retailer’s profit by a whopping $29,403 per month for all 100 stores combined. That’s $353,000 annually. Not shabby.
Your results will vary, of course. Your sales will be different. Your IT support costs will be higher or lower. The number of stores you have and the number of transactions you process each month will not mirror this example. And your profit margin will be different, too.
But this math holds true. And it is typical of the kinds of savings that many retail customers generate when they outsource their IT help desks.
How Outsourcing Your Retail Help Desk Improves Margins
Outsourcing your IT help desk improves your margins primarily because it reduces your costs. Again, your results may vary, but we have helped clients save and lower their costs in several ways.
First, you stop spending as much money on salaries and benefits. Your costs for advertising, screening, interviewing, hiring, onboarding, training, supervising, and rewarding help desk agents also vanish. This lets you reallocate budget to initiatives that result in higher client/stakeholder satisfaction (as this large furniture retailer did).
Additionally, outsourcing your retail IT support boosts your margins by increasing your sales. Customers will only stand in line for so long. If your registers are down because your help desk agents are unavailable, or because your agents lack the expertise to resolve the technical issues you have with your registers, expect to see frustrated customers walk out your doors empty-handed, heading for a nearby retailer (or online retailer) who doesn’t keep them waiting for a register.
Lastly an outsourced help desk troubleshoots every area of your business, from your front office to your back office, improving efficiency—and savings—across your entire organization. Outsourced help desk support for retailers goes well beyond simple cash register troubleshooting, and includes:
- PO systems
- Inventory management systems
- HR systems
- ERP systems
- Corporate systems
Better Support and Better Margins for Retail Businesses
The bottom line on retail help desk outsourcing is that it improves your bottom line.
Outsourcing part or all of your IT help desk to a professional third-party help desk vendor reduces your overhead, lowers your headcount, and increases your net profit margin for every sale.
Outsourcing pays other dividends, of course, including better coverage, reduced IT staff turnover, increased customer satisfaction (both your staff and your retail customers), and easier, faster scalability. Learn more about IT help desk outsourcing and its benefits.
