Best Practices for Managing Retail Inventory
Just like anything else in the world, to be good at something takes practice and experience. The experience will come with time and is not an attribute you can rush. Practice is where small business owners can separate themselves from the pack.
For the purpose of this lesson, practice does not mean running through drills with your employees to count your inventory as fast as possible, or seeing who can stack the highest box pyramid without it falling over. Practice means using the proper steps, procedures, and protocol to source and track your inventory, from the day it arrives at the store, until the day it is purchased.
Inventory management tips to put into practice are as follows:
Set up a System to Receive Inventory
When your inventory shipment arrives there should be a process in place before these items even think about hitting the shelves. Have one employee in charge of making sure the supplier's numbers on the packing list match the actual number of products you received.
Once that is cleared, enter the new updates into your counts. Delegating this task to one person (or a small group) increases their accountability for double-checking the numbers, ensuring that it gets done right the first time.
1) POS System
A point of sale system is absolutely crucial when trying to run a successful business. In short, a POS system is an electronic way to quickly track up-to-date inventory levels. Check out a separate article that contains information on acquiring a POS system here.
If your business is still physically counting inventory to get an updated quantity, you are using up a substantial amount of employee hours and payroll. It is impossible to maintain your inventory if you don't even know how much you have in the first place.
2) Loss Prevention Tags
Even when you and your employees are doing their best to keep accurate inventory levels, some outside forces may be working against your favor. Placing loss prevention tags on higher end items can be a cost effective way to make certain inventory and revenue is not walking out of your store unnoticed.
3) Know Your Best Sellers and Slow Movers
Hopefully this one is obvious, but being aware of what type of inventory sells faster than others is essential. Pay special attention to your fan favorites and most profitable items. Check out the data you have from prior year sales and account for any changes in the forecast.
Utilizing your stores POS system is key here. If you notice some items are not attracting as much attention as you hoped, don't be afraid to sell them for less than full price (this might be where we come in). Selling old inventory may turn out to be favorable in the long run because of the increased cash flows, and newly available store space.
4) Customer Relationships
This is sometimes an overlooked aspect of inventory management. Repeatedly offering good customer service will lead to customer relationships. Returning/repeat customers are a great way to clear inventory off your shelves in a timely manner. Make sure your employees are approaching guest with positive attitudes, properly trained on how the store policies work, and have an array of product knowledge if any questions come up.
When all else fails and you are still having trouble with excess inventory, BoxFox is here to help. Check out our free service we offer to independent retails. Simply put, we connect buyers and sellers of excess inventory.