Retail Inventory Management: 6 Tips On How To Effectively Manage Your Inventory

In order to run your retail store business smoothly, you must have a well-functioning Inventory Management system.

It might cause a lot of trouble if you don’t have one and start to disturb the execution of orders and day-to-day business. For instance, retailers may face challenges such as an incomplete picture of inventory, operational inefficiency, and obsolete stock among others.

To efficiently manage inventory, retail business owners need to keep track of how often the inventory turns. This means you keep track of how often you sell your inventory in its entirety or its financial equivalent.

As you determine the number of turns you have a month, you learn to order just the right quantity of replacement goods.

Managing inventory helps you keep your budget on track and enables you to efficiently manage your operating capital.

Retail Inventory Management is what keeps your whole business in order and your POS system. It is the set of systems and tools you use to keep track of the inventory in your store.

The goal of inventory management systems is to know where your inventory is at any given time and how much of it you have in order to manage inventory levels correctly.

Let’s discuss few tips on how to manage retail store inventory effectively;

                 1.Use technology that integrates well

When investing in technology, prioritize systems that work together. Inventory Management software isn’t the only technology that can help you manage stock.

Things like mobile scanners and POS systems can help you stay on track.

                 2.Track Inventory 

Track your inventory, either manually or with a computerized system. Track each item’s description, value, location and supplier.

Keep notes on how long it takes to reorder each item. If you do this manually, use cards for each product.

Use Radio Frequency Identification (RFID) technology to track products via a computerized system. The computer can identify when to place orders.

                 3.Prioritize your Inventory

Categorizing your inventory into priority groups will help you understand which items you need to order more frequently, and which are important to your business but may cost more and move more slowly.

                4.Track all product information

Keep records of the product information for items in your inventory.

This information should include Stock Keep Unit (SKUs), barcode data, suppliers, countries of origin and their numbers.

You might also consider tracking the cost of each item over time so you’re aware of factors that may change the cost, like scarcity and seasonality.

                 5.Analyze supplier performance

An unreliable supplier can cause problems for your inventory. If you have a supplier that is habitually late with deliveries or frequently shorts an order, it’s time to act. Discuss the issues with your supplier and find out what the problem is.

Be prepared to switch partners, or deal with uncertain stock levels and the possibility of running out of inventory as a result.

                 6.Track Sales

You should update your inventory totals on a daily basis with what items you sold and how many.

Understanding not just your sales totals but the broader picture of how items sell is important to keep your inventory under control.

For Instance, on a daily basis, what items you sold and how many, and update your inventory totals.

You can also Install point-of-sale, or POS, programs on your cash registers to automatically track sales of finished goods for you.

 Audit your inventory

Even with good inventory management software, periodically you still need to actually count your inventory to make sure what you have in stock matches what you think you have.

Businesses use different techniques, including an annual, year-end physical inventory that counts every single item and ongoing spot-checking, which can be most useful for products that are moving fast or have stocking issues.

In conclusion, always keep in mind that managing your inventory correctly helps to keep the budget on track and enables you to manage efficiently your companies operating capital.

By Carolyne Rabut
CompuLynx


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