The retail industry can be competitive and one of the biggest challenges for retail owners is managing the store’s inventory. Businesses need warehouses to store a wide range of products, each with a different variety. If retail stores do not carry enough stock of a product, they are losing potential customers who will then just shop elsewhere. You will need to employ an effective retail inventory management strategy if you plan to be successful at your business.
Retail inventory is probably one of the most complex types of inventory management, mainly because of the quantities required. In retail management, businesses need to be keenly aware of all the pieces of merchandise they need to carry. Furthermore, it can be difficult to maintain the right number of any particular item at any given time.
Retail inventory management involves processes and methods used to keep track of the stock in retail businesses. Retail inventory management should never be the job of any one person but should be divided into departments and classified accordingly. For instance, an individual may be assigned each for ordering, shipping, receiving, tracking inventory, retail turn-over, and storage. Retail inventory management can help keep a business’ profit margin steady as well reduce theft and inventory loss.
The appropriate retail inventory management practice is synonymous to exceptional revenues, while poor retail management spells disaster. Most businesses use some form of computer software or an automated system to manage their inventory. Unless the retail store is a very small one, doing it all manually would be very impractical, especially for very large companies dealing with tens of thousands of items.
Retail inventory management also enables retail store owners and supply chain managers to predict over- and understocked items. When demand projections fail, the next best solution is to still sell items to the customer. This is true even if you incur a slight operating loss. By selling to the customer at a discount, customer-business relationships are built, and the business is saved from additional carrying loss incurred with other reverse logistics processes.
Finally, take note that the truth about retail inventory management is that you cannot sell what you cannot find for the customer. Failing to maintain an accurate locator system can have the same impact on your sales as physical shrinkage via theft or damage. Real-time maintenance of an inventory control system is critical to success.