3 Essential Inventory Management Best Practices
Streamlining inventory procedures should be the goal of any retailer. Inventory management can be a time-consuming task and the bane of many employees. Manual inventory is often riddled with human error and does not offer management a real-time sum up of the inventory levels.
Inventory is one of a company’s most valuable assets, but it can also be very expensive to house in a warehouse. Holding costs, such as warehouse leases, utilities, and security, will cut into profits and affect a retailer’s bottom line. The overall financial health of a retail store is rooted in how it manages its inventory.
Businesses Need Inventory Strategies to Remain Competitive
Managers need to figure out some basic inventory strategies and evaluate:
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What items need to be reordered?
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What items are in stock?
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What products need to be discounted to get them off the shelves and out of warehouses?
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What is their inventory turnover? (Finding a way to save on holding costs by striking a balance between having too much or too little inventory)
3 Easiest Ways Businesses Can Effectively Manage Inventory
1. Manage Your Inventory With Retail Software.
Inventory control has become easier over the last few years due to point of sale software and retail platforms. Inventory tracking software is an easy option to help build a profitable retail business.
An easy to use inventory control system allows users to add, edit or remove products from stock.
It tracks inventory across one store or multiple locations in real time. Knowing what products are flying off the shelves and what items are lingering on past their “sell by date” leads to informed purchasing decisions and pricing strategies for each quarter or seasonal retail period. Auto-reorders popular products when the inventory hits a predetermined number.
POS platforms accurately measures inventory turnover at single or multiple store locations (along with pop up stores and off-site sales) and facilitate maintaining stock levels and maximizing the strengths in your inventory catalogue. Detailed inventory reports are possible with images and specs related to size, color, prices, seasonal items, and other variants.
Tracking inventory with POS software makes it easy to see trends in the popularity of products and making it easier to plan the layout of warehouses and store shelves.
For example, popular items can be moved towards the front of the warehouse to save time retrieving them, while less in demand items can be stowed in the back. Or display popular products at the front of a store where there is more foot traffic and less popular ones can be delegated to the back of the shop.
2. Use Real-Time Reporting To Share Inventory Levels
Using a cloud-based POS system is a key way that businesses can remain organized and see the trends within their stores. Cloud-based point of sale software means access to up to date data anywhere and anytime.
With an iPad or other compatible device, employees and business owners can get insights into their loyal customers, bestselling products and busiest hours of store foot traffic. Management can track sales and know what is going on in the store even as they travel the globe for business or leave town for a two-week vacation.
Income and product reports are easily accessible and shareable, keeping entire financial, sales, marketing and purchasing teams in the loop. Point of sale systems make it possible to monitor inventory and financial performance in real-time at multiple retail sites as a company expands.
In order to operate a business at an optimal level, sales teams, purchasing managers, marketing executives, and senior management need to share information regarding which products are flying off the shelves and which items are lingering on the shelf after their sell by date and inventory turnover (stock turn).
Sales teams are the front line of any retail operation and can gauge whether a product is a hit or a flop with their customers.
The marketing department may have to work harder on increasing foot traffic in the stores or improving an online presence.
Management and the purchasing department need to periodically review inventory turnover to determine what items are worth ordering again and what items need to be nixed from the reorder list.
3. Automate Inventory Control
Small business can save substantial work hours on automating inventory control and relying less on manual review of stock. Asset tracking is extremely difficult manually.
Using a handheld barcode scanner is a simple, fast way to fully automate inventory information – saving on manpower hours and collecting data on a central platform. Once entered into the point of sale system, managers can keep track of products in terms of sizes, colors, materials, etc. in a way which surpasses what any manual inventory review can provide.
A retail platform can be set up to support automatic reorder when products hit a predetermined level and stores the product details and specs. Auto-reordering means it is less likely the store will have empty shelves. An employee might forget to order the beans for a coffee shop, but the retail platform/POS system will schedule the order on a regular basis (and running out of stock may become a thing of the past).
Point of Sale (POS) Software as a Tool for Inventory Best Practices
Point of Sale (POS) systems are a good fit for all business models, including fashion boutiques, gift shops, shoe stores, homeware stores, beauty salons, restaurants, coffee shops and bike shops. Retail platforms are no longer the purview of mega-retailers. Even mom and pop stores or small traditional brick and mortar retailers can benefit from organizing inventory control and tracking one of their most valuable business assets.
