The retail industry can be extremely competitive and one of the biggest challenges is managing a store’s retail inventory. Businesses need to have space to store a wide number of products along with a wide variety. If a retail store does not carry enough of a product, then they are losing potential customers who will shop elsewhere.
Retail inventory is different from other forms of inventory because of the quantities needed. Retail chains need warehouses to keep all of their stock and the means to transport it to their stores. Keeping up with such large quantities can be difficult for anyone, even with the help of an automated system. To track a company’s products, a retail inventory management system needs to be successfully implemented.
What Is Retail Inventory Management?
Retail inventory management is the process and methods used to keep track of the stock in a retail business. These methods control everything from ordering, shipping, receiving, tracking inventory, retail turn-over, and storage. Retail inventory management can help keep a business’ profits at a steady margin as well as reducing theft and loss of inventory. Many retail businesses lose money every year because they do not have a successful inventory management system in place.
Retail Inventory Management should provide the following functions for a retail business:
- Track and manage all of the inventory for the business
- Keep up with store markdowns
- Evaluate how well some groups of products do in sales
- Provides analysis for comparison shopping with competitors
- Collect data on the sales and inventory of individual stores using SKU
- Allows you to accurately review your inventory
How To Manage Inventory
A business that has a successful system for retail management will allow the business to keep a sufficient amount of stock to meet customer demand. If a business does not have enough inventory, then it can slow down cash flow. Too much inventory can cost a business money and take up more room.
When dealing with retail inventory management, companies will utilize one of these systems:
- Point-of-sale terminals – These are check-out points that automatically update a company’s inventory levels.
- Job costing and inventory systems – Another automatic system that updates computerized levels of inventory.
- Barcodes and readers – Every product these days contains a barcode with the items information. Barcodes makes it easy and quick track stock.
- Electronic Supplier Product catalogs – This system can update inventory levels automatically through either the internet or media disk.
Managing retail inventory involves several characteristics and steps. One of the most important steps is to make sure that you always remove products from the system as soon as they are sold. The same is true for receiving shipments of new stock. Make sure you record it as quickly as possible.
Physical inspections should be regularly performed to make sure the computerized system is accurate with what is actually in stock. A physical inspection involves manually looking over the stock to see that they numbers match.
Review sales reports weekly. You want to do this to see what is selling and what is not. Products that spend more time on the shelf should be re-evaluated or discounted to get rid of them.
Another step is to research to find the right products to sell. Businesses should come up with a target market and try to carry the right type of inventory to meet that target. To make sure that you have the right product in your stores, you need to know what type of products to order and how much, when to order, and when the products should arrive.
Keeping up with retail inventory management should be delegated to several individuals or a department. Supermarkets that have both grocery and non-grocery items have separate departments for each. By delegating inventory into smaller groups, it allows the individuals in charge of their group to have a better understanding of what stock is available an dhow wel it sells.
Prevention of Inventory Theft and Loss
One of the biggest problems to plague retail inventory is theft and loss of retail products. Every time this happens, it costs a business money. Preventing inventory theft can be difficult. But with the right system, you can definitely reduce it. Here are some tips:
- Do not share or hand out the same password for every cashier. Having separate passwords and log-ins tells who was manning the register at certain times.
- Always check out any transactions that were voided or canceled. This is a common way for inventory to disappear from a store.
- Set up a password-protected security on all computers and systems. Only when employees absolutely must have access should it be granted.
- Go over inventory reports every day to make sure sales figures match with the current quantities.
- Make sure the back door has a security alarm system that is activated every time the door is opened without authorization. If employees know the door should not be opened without permission, they shouldn’t open it.
- Inspect the garbage every night before it goes out. Use clear plastic bags so that you can easily see inside the bag and make sure there is no inventory hidden inside.
- Set up security cameras not only in the store but in the back storage as well. This allows you to keep an eye on items out on the racks as well as in stock.
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