- by vincent soriano |
- October 24, 2016
- Growth Hacks | 4 min read
Inventory Management – Best Practices
Inventory optimization begins with knowing what you have and managing it well. Many businesses spend money to expand without upgrading seemingly innocuous procedures, such as effectively managing inventory. Attention is focused on the challenges of day-to-day business—without much thought given to seemingly mundane tasks. As a result, companies experience frustrating aspects of unsuccessful inventory management before seeking out solutions designed specifically to track and manage stock.
The good news is that inventory management doesn’t have to be as hard as you think. Here are seven best practices to help you master inventory management.
Track your inventory
Tracking your inventory is your secret weapon. You get precise information when you want it helping you to make informed decisions. So, if you are still using Excel spreadsheets or – even worse – handwriting it in a book, you are leaving room for errors. We recommend using a retail POS system that has inventory management facilities. This can save you not just your time but can also minimize inconsistencies.
Take the time to set it up your information properly. Incomplete or incorrect decisions will lead to ill-informed decisions later. Consider tracking – stock keeping units, costs, manufacturer/vendor information, categorization and location. Keep a track of each item’s lifecycle – from the date of purchase to its arrival to its sell dates, as well as cost and sell price. A modern POS system will automatically record this data for you.
Eye on the costs
Top-performing retailers also manage inventory based on profit margins. To manage by margin, not only do you need to know what’s selling the most, you must have an idea of what’s producing the highest profits, then you can focus on brands and vendors that yield the highest profits.
Manage inventory from a single system
Opt for a centralized inventory management system. This saves time, reduces errors and fulfills orders more efficiently.
Whether due to damage, theft, misplacement or mismanaged paperwork, inventory shrinkage can reduce your margins significantly. Modern POS can help you avoid these mistakes and save money.
Monitor your sales & stocks
By examining historical sales data and tracking inventory levels, you can better predict your buying needs and ensure that you’re always well stocked.
Sell-through and weeks of supply are useful calculations for managing aging stock. Use them to ensure you aren’t tying up your money in old or stale inventory, or getting stuck with out-of-date merchandise.
To ensure the right inventory is moving at an optimal rate, independent retailers need to track inventory data efficiently and effectively. With the right point of sale system and by following our inventory management best practices, you’ll be set to bring in inventory that your customers want while keeping it fresh.
Managing the business on your fingertips was never so easy!