As a retail business owner, your time is a precious commodity. Whether its managing staff, keeping the books, working with customers—or all of the above—you’re running in several directions at any given moment. In the day-to-day, inventory management is often one aspect that gets pushed to the side. The lack of inventory attention shows itself too late in many cases, leaving retailers short of key products, resulting in loss of revenue and even customers.
When helping a company redo their inventory, our advice essentially boils down to two steps: analyze and upgrade. You’ve likely already done both of these in terms of your inventory storage. You analyzed your storage needs, from shelves to coolers, from labels to bins, and you’ve upgraded your space accordingly. The hard part is applying this advice to your inventory management system. How do you do it?
Appraising Your Inventory Management for Small Retail Needs
If you’re consistently ordering too much product, your cash flow is tied up in your inventory instead of being available for daily expenses. If you’re ordering too little, you risk upsetting your customers with empty shelves and unavailable items. To understand your inventory needs, you will need to start by conducting a thorough analysis of your current inventory processes and how they are impacting your bottom line.
You’ll want to make sure that you’re using the Key Performance Indicators (KPIs) that apply specifically to your unique business sector, but in general, you should be able to answer the following questions after your analysis:
- Are there items your customers frequently demand that are consistently out of stock? While creating a demand for your bestsellers is important, every customer you turn away is a lost sale. By understanding which of your products are your customers’ most wanted, you’re able to effectively adjust your orders to match their needs.
- What are your overall costs due to an excessive stock of particular items? If you’ve ever had a product sit on the shelves for weeks or even months at a time, you know how frustrating it is to open a new inventory shipment and realize you accidentally re-ordered a poor performer. Not only will that product be harder to sell, but your money is also further tied up in that stock when it could be used elsewhere.
- How much time do you spend maintaining your inventory system? This will vary wildly depending on if you have a barcoding system in place or are still relying on manual pricing stickers. However, if your answer to this is “not much time at all,” you probably need to rethink your approach to your inventory.
- What level of sales data do you get out of your inventory system? If you’re still relying on trusty pen and paper method, you’re probably not receiving much insight, if any, from analyzing inventory trends. Understanding your sales data on a deeper level helps you adjust your inventory in real-time and saves you money while you do it.
- How easy is your reordering and restocking process? Can you set up automated inventory alerts to trigger an order? Imagine the ease of your stock being handled for you. No more pacing the back room with a clipboard trying to get an accurate tally of each product. No more phone calls to your distributor. No more clumsy online order forms. Sounds nice, doesn’t it?
And if you really want to get ahead: how does your inventory process stack up against your competition? This is one area where you not only want to “keep up with the Joneses”, but to surpass them in terms of inventory management and efficiencies. If your funds aren’t tied up in common inventory mishaps, you’re able to spend more money on gaining that precious competitive edge. After you have taken a deep dive into how your current inventory process works and how it holds up against other small businesses, then you have a better opportunity to improve how your business functions.
Upgrade to the Most Efficient Inventory Software Solution for You
Automation is a game-changer in retail inventory management. An agile inventory solution provides real-time tracking of the inventory on your shelves and the backroom while providing robust reporting to tell you what’s flying off the shelves versus a product that’s collecting dust. The ability to create automated low stock alerts, which can be tied into low stock automated ordering rules, is a drastic time saver. You will no longer be saddled with excess inventory as a result of a human ordering error. Plus, you’ll always have the items your customers love when they walk in your doors.
This reduction in workload for both yourself and your staff will allow the focus to be shifted from operational tasks to marketing and customer service duties. Your time is important. On any given day, you’re probably spread thin across dozens of different tasks and responsibilities, some of which are more deserving of your attention than others. A streamlined inventory management system takes a lot of the busy work off your plate and allows you to focus on what really matters: growth and development. Whether your time is spent crafting the perfect marketing campaign or giving your storefront a seasonal design update, you’re not spending countless hours going through your stock and placing orders.
Our Best Recommendation for an Inventory Management System
When running a retail shop, you are faced with a multitude of choices in your typical day-to-day. Reducing the amount of time spent on inventory control, while increasing the cost-effectiveness of precise stock management is an easy one for any of us to make. But with hundreds of inventory management solutions out there, getting help to make the correct choice for is crucial for yourself and your business. Luckily, the choice is clearer than you might think.
With a responsive system like talech, you come away with just as much insight into your business as any big box retailer has into theirs. Get in touch with us today to sign up for a free demo and more information on how to innovate your inventory management system.