Retail inventory management isn’t fun.
You don’t get the thrill of interacting with your customers or the excitement of setting up marketing materials for the new brand you just rolled out.
Instead, you get late nights performing your stocktaking process and sorting piles of purchase orders and sales reports.
Although retail inventory management is the last thing you ever want to do, it can make or break your business…
Walmart lost $3 billion in 2013 because they were constantly out of stock.
If they were anyone but Walmart, they wouldn’t be in business anymore.
If you can’t effectively manage your inventory, then you’ll certainly lose revenue and may actually go out of business.
To help you keep your business and grow your revenue, here are 12 tips you can use to improve your retail inventory management.
9 Tips on Retail Inventory Management
Reduce Your Lead Time
You can prevent the kind of stockouts Walmart suffered from by implementing lead time reduction strategies.
The faster your stock arrives, the less you need to worry about not having enough inventory to fulfill your customers’ orders. Making your customers happier, and giving you a competitive edge in the market.
Decrease Product Range
If you’re carrying too many items that aren’t selling, it’s time to narrow your focus.
An overabundance of inventory dramatically increases the cost of inventory because it leads to holding obsolete products that you’ll have to discount, bundle, or donate later. And all that extra stock takes up valuable storage space for products that people do want to buy.
In contrast, a smaller inventory will dramatically decrease your inventory costs, which will help you avoid holding excess inventory. And, you can now enjoy the flexibility to test a few new products if you want, all while saving the majority of your space for your best-sellers.
Automate Inventory Receiving
Efficient retail inventory management begins the moment your stock arrives.
Your warehouse managers and employees shouldn’t have to think about what to do once they receive a shipment.
Either delegate this process to a small group of people who always handle incoming shipments, or if your business is fairly small, make sure your whole team understands the procedures to follow.
Increase Your Rate of Inventory Turnover
Increasing your rate of inventory turnover will make retail inventory management much easier.
First, the more inventory that leaves your warehouse, the less inventory that you need to manage inside your warehouse.
Second, a high inventory turnover rate means you have a clearer idea of what’s selling and what’s not. With this data, you can focus on only stocking items that you know will sell.
Third, a high rate of inventory turnover helps you prevent holding on to obsolete stock, thereby reducing your total cost of inventory.
Loss Prevention Tags
It doesn’t matter how big or small your store is…
Some people will steal from you.
To prevent significant revenue losses like this, it’s helpful to install theft prevention devices like loss prevention tags.
Using these tags on high-end items or in-demand items can help you stop theft before it happens.
Forecast Future Demand
The better you are at anticipating future demand, the higher your sales will be – making retail inventory management much easier.
Instead of worrying about what will sell, you can look at past sales during different times of year and forecast what will sell, and order more of those items and less of others.
But sales reports are only one way to forecast customer demand.
Here are a few other things you can do:
- Conduct customer research
- Survey customers
- Listen to experts in your industry
- Listen to your sales staff or other key people in your company
- Pay attention to seasonal trends
Hire the Right Employees
Retailers lost $60 billion in shrinkage in 2015.
What was the biggest cause of their losses?
This statistic comes from the US Retail Fraud Survey. Of all the reasons for shrinkage, 38% was cited as “employee theft.”
Any kind of shrinkage will disrupt your retail inventory management, and theft is no exception.
When hiring employees, make sure to check their background, check their references, speak with their previous employers, and foster good relationships with them to avoid creating disgruntled employees.
Set a Consistent Stocktaking Process
Creating a consistent stocktaking process is a huge part of managing your inventory.
It helps you identify problems before they get out of hand, informs your ordering and stocking decisions, and helps you forecast demand.
Unfortunately, many businesses are still using the outdated method of Excel inventory management, which brings us to our final tip…
Use Inventory Management Software
A cloud-based inventory management system will streamline your stocktaking process, automatically update your inventory information based on your purchase orders and sales, and will generate real-time reports you can use for forecasting.
Everything you used to do by hand will be done more efficiently for you.
How can you get this software?
Through our free trial offer below…
Retail Inventory Management Made Easy
From stock levels to order status, you’ll know exactly how much inventory you have and when it’s leaving or arriving your warehouse. All sales will be tracked from your physical store and your ecommerce stores, across all of your locations. We’ll automate your retail inventory management so you can focus more on growing your business and less on maintaining it.
Start your free 14-day trial of DEAR Inventory today!
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