Inventory management can make or break your retail or ecommerce store. In the eyes of a business owner, you need to ensure that your ‘supply’ meets your customers’ demand, whilst at the same time ensuring that all of your working capital isn’t tied up in unsold products, collecting dust in your warehouse.
Here are some do’s and don’ts for ensuring that your inventory management system makes the grade.
Do Secure Your Inventory
Inventory theft and loss costs retailers dearly. Whether it’s through shoplifting or admin errors, reducing the impact on your bottom line starts with installing a secure inventory management system.
Once you have accurately counted and tracked where every item of inventory is located, you can start to measure your shrinkage levels and plan from there.
Don’t Waste Time on Manual Inventory Management Systems
Picture the scene: a busy customer approaches your sales staff to check if you have a pair of shoes in their size. The assistant checks the store’s database, and then has to go to the stockroom to look for the shoes for five minutes. Then, even after hunting high and low, the shop assistant comes back empty-handed and offers to order in from another store…..(By now, your customer is reaching for their smartphone and typing in Amazon).
In ecommerce, manual inventory system failings can be even more jarring. Imagine trying to order some shoes online only to get an email the next day saying:‘sorry this item is out of stock’?
For retailers in highly competitive markets, having all the necessary inventory data at your fingertips will improve your customer journey, and eliminate any unhelpful inventory errors. Instant access and smart syncing are modern retail inventory must-haves.
Do Automate Your Systems
With cloud technology you can set up an inventory management system that works across all your sales channels, and costs less money to set up and manage than manual or software inventory systems. Automation can help you always make the right purchasing decisions, and automating your stock re-ordering will ensure you never run out of your bestsellers.
With a service like Shopify, you can even go one step further and automate elements of your email marketing — emails are a great way to bridge the gap between customer and inventory.
Don’t Hold Onto Old Stock
If something isn’t selling — you need to A) know B) get rid of it, and C) not buy it again.
Inventory age is an important metric, so you need to figure out a process for tracking the stock that has ‘aged’ so you will know when it’s time to put these items on discount.
Working out your customer conversion and retention rates can also help you reduce the amount of unsold stock in your outlets. Metrilo can help you drill down into product data, looking at products that get views, but make no sales, or bundles that aren’t performing so well.
Do Explore Your Supplier Options
You need to make sure you are set up for success in today’s retail environment; your supplier relationships will be crucial to your success as a business. By using automated systems, you can accurately track your suppliers’ lead time on making deliveries, giving you the opportunity to assess their competency and consider ordering from another supplier if they cannot meet your customers’ demands.
With dropshipping arrangements through sites like AliExpress, ecommerce brands and retailers can give themselves more flexibility in the items they stock. As you only pay for the goods once they are sold, and a third-party handles the fulfillment and storage of your inventory, you can quickly chop and change items as your customers’ tastes change.
Do Think About Inventory Strategy
Even with inventory automation, there still needs to be an overall inventory and data strategy that touches all parts of your business — from HR to marketing. Think about how data and information flows through your business, and who needs to be involved in what tasks.
Here are some things to consider implementing:
- Full training for all members of staff on updating and tracking inventory levels. In terms of updating, ensure that the full product descriptions are listed as well as descriptive ‘tags’ to help all members of staff identify stocked items accurately.
- Ensuring that all items are barcoded securely, to reduce the number of ‘miscellaneous’ transactions to as close to zero as you can get. Further, you may wish for only senior members of staff to be able to ring in uncoded goods.
- Spend dedicated time labeling all returns to ensure that no faulty goods can be resold by mistake.
Don’t Forget About Scalability
If you’re an omnichannel business or a business considering the move into new sales channels, automation can allow you to track inventory across all platforms and control everything from one dashboard. Even if you only sell online or in a store at the moment, investing in the cloud technology now will allow you to scale-up your operations easily in the near future.
Getting on-board with sophisticated systems now will help you plan for the future and keep up with the latest retailing trends. RFID (radio frequency identification) tag represent an exciting new opportunity for retailers. These allow you stores to recommend items for up-selling, based on the tags your customers have with them in the changing room! And online, VR is offering brands the chance to showcase product experiences in an immersive, engaging way. You need to keep your eye one the next five years, not the next five weeks.
To stay afloat as a business you need to get a grip on your inventory. Ensuring its accuracy will help you protect your working capital. In today’s hyper-competitive market, those who emulate the biggest and the most trusted brands will succeed. But luckily, any business, large or small, can begin today with a future-proof inventory management system!