Inventory Control Tips: The Experts Weigh In
This might not be quite as entertaining as a Buzzfeed List (21 ways you could be a Chinchilla), but inventory management is an important topic retailers should pay attention to. After all, if you have too much inventory, there’s less room (and funds!) You will be unable to provide fresh products and your customers with satisfactory service if you have too much inventory. These are just five tips to increase your inventory.
1. Go digital
Independent retailers are still able to track all their goods manually. Even though physical inventory counts can be important, it is tedious and easy to make mistakes. Even if you run a small retail business, it’s wise to use an automated system to keep track of inventory– it saves time (i.e. You will have real-time details about the stock level, top performers, and much more. You should look for products that can be scanned or barcoded to track goods.
2. You must ensure that your total costs reflect the true cost of production
Although it’s obvious to have the best inventory levels, how about having the right quantity of products and brands that are performing well? Sometimes, it can be difficult to maximize sales for the products with the highest margins due to quantity discounts, special orders and wholesale price changes (that may not have been noticed).
It’s why looking carefully at total costs lets you know which products have the best margin, rather than just sell the fastest.
What is the point of total cost calculation?
- Concentrate on the brands and vendors with highest profit margins
- Learn which products are the most effective based on their quantity margin
- You can manage your discounts better by keeping an accurate account of the item’s cost
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3. Centralize data
While your web store may be set up as a separate business, it shouldn’t appear that way to consumers! It can really boost sales by ensuring customers have the ability to order online and then return it in-store. If your inventory isn’t centralized and tracked in real-time between both online and offline, this could spell disaster. You can manage your inventory using one system to have complete control of every aspect of your business.
4. Inventory Shrinkage
Shrinkage, which is inventory loss from theft or damage, can be controlled in many different ways. Although shoplifting may be an issue, poor inventory tracking often leads to more serious problems.
FACT: According to the National Retail Security Survey, 2012. Retailers experienced an average of 1.47 percent shrinkage.
What can you do to prevent this problem from happening? You can track inventory using a POS system. This can provide accurate reports which can be used to help identify shrinkage. (See point number 1).
5. Out with the old – ASAP
It’s ok to be ageist when it comes to inventory. Stockpiled inventory can eat up precious space, particularly seasonal items that have been in stock for months. This could impact cash flow and cause cash flow problems. Consider re-pricing these items with “white ticket” markdowns, merchandising them differently, or selling them at a pop-up event.
You want to learn more about inventory management and how you can ensure your stock levels remain on track? Learn more about our best practices in inventory management.