Inventory management is one of the most important aspects in a retail company. Retailers must always be able to ensure that their inventory is sufficient to meet consumer demand. They also have to make sure that all their items are sold so that they don’t end up taking up space and becoming worthless.
For those of you who are just starting a retail business, managing inventory might be difficult at the beginning. However, with the right inventory management strategies, everything will be a lot easier and you’ll find your way to optimize your income more easily.
1. Research before launching a new product
When you are thinking of launching a new product, you need to ask yourself several questions such as:
- Does the product have high demand?
- Is the product trending right now?
- How easy is it to get the product from your supplier?
Launching a product without careful consideration will only make it difficult for you to manage your inventory, because you may have to deal with dead inventory, or on the contrary, shortages. Therefore, make sure the product you’re going to sell is wanted by customers, trending, and can be easily obtained.
2. Choose the right suppliers
Getting the right suppliers will help optimize your inventory management. Reliable suppliers are the ones who can be easily contacted, are able to send the requested goods on time, and open to negotiations. Likewise, you must be a dependable customer so that your suppliers will always be happy to work with you.
3. Use an inventory management app
As a new retailer, utilizing an inventory management app will greatly help ease your work and simplify your inventory management. With this app, you can set a minimum level of each stock, track inventory levels across multiple outlets, get automatic alerts when stocks run low, arrange stock locations in warehouses, and much more. You can also analyze your inventory easily using real time inventory reports.
4. Promote your slow-moving items
What do you expect when you find your old items piled up in the corner of your warehouse or store? Surely, you want to remove them and replace them with new ones, right? Implementing the FIFO method can be an effective way to do it!
In inventory management, FIFO which stands for First-In-First-Out is a method of getting products that first entered the warehouse to be sold first. There is also a method similar to this, namely FEFO which is short for First-Expired-First-Out, meaning that the products nearing their expiration dates must be sold fast. The FEFO method is usually more often applied on food medical products.
Now the question is how do you get the products that first entered the warehouse to be sold quickly? Below are some ways you can do:
- Discount your slow-moving items
- Put old items in easily-accessible areas, such as on the front shelves or near cashiers
- Bundle your slow-moving items with popular ones
- Make your old items complementary products
5. Perform stock taking effectively
We can all agree that stock taking is an exhausting task, but it must be done to optimize inventory management. Stock taking is essential to ensure that there’s no discrepancy between the number of items on hand and the number of items in the record. The method of stock taking used depends on your retail business type and the number of products sold. In general, there are three types of stock taking methods:
1. Daily Stock Taking
This method is suitable for use in supermarkets where the number of goods sold decreases and increases significantly each day. This activity is usually done in the evening before the shop closes.
2. Annual Stock Taking
This stock-taking method is done once a year. This is perfect for retailers that sell durable products in large quantities. This activity is usually carried out by the end of the year or when closing entries.
3. Periodic Stock Taking
This method is done regularly, three or four times a year. This is very suitable to be applied by micro or new retailers that do not require a lot of people when doing it.
With ClickWork, stock taking can be performed more easily and accurately, because the data recorded in the system is always updated in real time and automatically, every time an item enters and exits the warehouse. Thus, error entries or any discrepancy between the physical amount and the recorded amount is unlikely.