Tips on Managing Inventory for a Retail Store
The retail industry seems to be ever growing and is overwhelmed with rising consumer demand. It is vital to keep inventory in control for any retail business to keep going. Inventory is the goods that a retailer has in his/her shop or warehouse. Keeping track of inventory is necessary to keep up with customer needs and changing market conditions. It isn't an easy task. This article contains best practices on managing inventory for a retail store.
Count and organize: Getting organized always helps. If an inventory is checked, counted and organized frequently, there is less chance of losing track of a product. It is good to schedule this task in regular intervals. It helps in keeping track of products and also makes the store look organized, clean and attractive. Keeping a store clutter free indicates a sense of professionalism. Also, whenever a shelf in the storage room is nearing emptiness it will signal that you may want to order the product from your supplier. Continuous replacement of finished goods and regular de-cluttering of the store always creates a positive effect.
Inventory tracking system: For a small retail store manual inventory tracking may work well. However, for a bigger store it is better to choose an inventory tracking software such as Finale Inventory or Fishbowl Inventory which is designed to help manage inventories for larger businesses. These systems make retailers more efficient in tracking every SKU (Stock Keeping Unit) and help with decision making regarding purchasing orders from vendors and managing the supply chain.
Prevent losing inventory: Anything can happen (from theft to accidents leading to damaged goods) in a retail store. Opting for electronic tags and bar codes that can be scanned, make inventory management easier. Installing video surveillance in the retail store also helps, provided the budget can accommodate its cost.
Tracking product status: Know which product is hot and which is not. Today’s most demanded product can become obsolete tomorrow, so place them accordingly in the store. Slow moving items can be stacked near the back of the store while fast moving items should occupy a more prominent place, such as the window display. Different products need different space and visibility at different times. Every store manager should try to consider these factors while organizing inventory in a retail store.
Never go out of stock: Customer satisfaction is of utmost importance for any business. If a store goes out of stock for a particular product that can be obtained elsewhere then the odds of losing customers to competitors is very high. The days when customers used to wait for retailers to refill their stock to make a purchase are long gone.
Balance the inventory: Having too big and too little inventory is never good. Storing more inventory than needed means more space requirement, higher transportation costs, increased labor cost and perhaps most important, less cash. Having too little inventory can lead to customer dissatisfaction. Having an optimal level of inventory in a store room or warehouse as well as supplier delivery that matches consumer purchasing patterns is the goal that retail stores should strive for.
Avoid stress and disaster: Hire an inventory manager if you feel the job is stressful to you or your store has grown big enough and managing inventory alone is becoming too cumbersome a task.
All in all, inventory management in retail stores can be summed up as a task that must often use educated guesses. There are enterprise resource planning tools, such as inventory management software, that can assist store managers with this task if doing it manually isn't realistic.