Having the right products at the right time for your audience is critical in retail. This is why inventory management, or stock control, is critically important. Inventory management encompasses all the tasks you carry out to keep your inventory in check. Activities like ordering products, storing your merchandise, counting items, and forecasting demand are all components of inventory management.
In order to run a successful retail business, you’ll need to think about the following key areas:
Sourcing products effectively
Tap into online directories, attend trade shows, and analyse your stock data. Talk to your customers and staff, and review your sales data to guide your purchasing decisions.
Understanding different inventory techniques
Determine the best stock control method for your store and the products you sell. For example, ‘Just in Time’ means you only order when you need something, but it can involve a lot of work with suppliers. Food businesses might be more likely to use ‘first-in, first-out’ method where items that have been on their shelves longest, and therefore are closer to expiry, are ordered first.
Tracking metrics
Tracking Gross Margin Return on Investment will show you how much money you earned on the sales of a product. Stock Turn shows you how many sales within a period, and Shrinkage gives you figures on inventory loss that is not a result of a sale. The more you know, the easier it will be to always have a handle on product movements and sales.
Conducting physical inventory counts regularly
Inventory auditing ensures that what you have on paper or in your systems, matches what’s in your physical location.
Implementing demand forecasting
By digging into historical data in your product reports, and determining how fast products are selling, you can forecast what products are likely to be in demand, and you can order more of those. You can also look at seasonal trends and talk to customers.