In retail shops or grocery stores, you need to have a strategic inventory management. This is the best solution to keep track of your budget, profit, and other expenses. Monitoring these “figures” allows you to manage your finances more efficiently. Today, even some of the biggest corporations still make major errors with their inventory.
Learn some of the common mistakes business owners usually overlook when managing their inventory. Recently I went snow goose hunting in New York and met Captain Joe Austin, the leader of the hunt and owner of DOA Outfitters. The conversation with him about business spawned this article as he was recalling his days as owner of retail stores before setting up in the hunting business.
Accuracy is everything.
From getting the stocks to your suppliers to delivering the goods, make sure to list down everything. Double check your transaction sheets to avoid miscounts. For bigger inventories, you will need barcode labels for better accuracy. Usually, manufacturers have separate accounts for yield or scrap during and after the production.
One way to prevent miscalculation is to utilise cycle counting. This is to organise each item on a daily basis making it easier for you to track down the inventory record. You may also use advanced tools such as barcode scanning device for proper product labelling.
Too much is always bad.
Over-inventory can cause a lot of headaches. Warehouse fees and other expenses can definitely burn holes into your pockets. Your safest best is to get the right amount of stocks on a timely manner. Monitor your monthly sales before restocking. This will help you come up with decent projections of how much supply you will need. Consider other factors such as weather conditions and product timeline.
Time is valuable.
Time is the biggest investment you have; so spend it wisely. Always check your calendar and see if you’re ahead of your timeline—restocking, supply and demand forecasting, stock recounts, and other important tasks you need to accomplish. When dealing with products, focus more on the highest selling items. Update your sales flowchart for reference.
These are some of the basics you should know when dealing with inventories. Always have a contingency plan. Hire a professional service when necessary. There are services available to train in stock rotation and general inventory management. Considering the potential for loss it’s short term pain for major long term gain.
Here is a useful video about inventory management.
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