43% of small businesses don’t track inventory at all or use an antiquated method.
43% … as in, nearly half!
Doesn’t that sound crazy to you here in 2019?
Now look, managing retail inventory is no simple task. Yet, massive corporations like Costco and Walmart manage to turn their entire inventory over 10-12 times per year.
This leads to you having stockouts when you need to sell a certain product and too much stock of product that isn’t selling now.
Here’s what you can do to make sure you have the right amount of inventory in stock all year round so you optimize your sales revenue and profit margin:
1. Automate Like Crazy
Look, a step saved is…a step saved! The large retailers use automation to the maximum extent possible.
If you can get computer software to save your employees a step or two, by all means do it. This gives them time to focus on higher level decisions software can’t make or do.
Physical counts of your existing inventory still have to be done to make sure inventory matches what’s in your POS. But those can be minimized, which creates a consistent shopping experience for your most valuable customers.
2. Make the Most of Your Surplus
Look, sometimes market trends shift so quickly that you’re left with too much inventory. You simply can’t always make the perfect decision.
What do you do when that happens?
Because, if you simply toss your product in the dumpster, that leads to dumpster diving, security issues, and a negative reputation in the area.
Why not create a win-win-win for you, a non-profit organization, and your bottom line by donating the excess inventory to someone who needs it?
3. Personalize Each Store to the Local Market
Your POS software shouldn’t just sync inventory at a single location. It should sync inventory across all physical stores so your employees can find the nearest location with the item, and then ship it to your customer.
Being able to view inventory by location or across all locations at once lets you identify local market trends.
Of course you don’t need to have 100% unique inventory at each location. But you might have 20% or so that caters specifically to the local market…and they’ll love you for it!
4. Have at Least A Simple Cash Flow Management Process in Place
You know the massive amount of capital you need to operate a retail business. So, it’s important to make sure you always have enough so you can buy the inventory that sells best when you need it.
At a minimum, you should have a spreadsheet which outlines:
- Monthly sales goals
- Fixed and variable costs
- Planned inventory purchasing 2-3 months away
Regular review of this will alert you to any upcoming cash flow crunches.
Look…managing a physical retail location isn’t easy…but it just got a lot easier for you after reading those tips.