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How to Keep the Right Merchandise in Stock and Become a Better Inventory Manager

- By Bob Twain

Keeping your inventory accurate is one of the most important aspects of your business because if you don't have enough inventory, you'll lose sales. If you have too much, you'll tie up valuable cash in an overstocked inventory. Not to mention, your merchandise is what defines your store and tells the customers who you are.

That's why it's essential for you to ALWAYS order what your customers really want to buy. That might seem obvious, but most retailers make the critical mistake of ordering merchandise based off what they like or what they think is going to be a hot seller instead of what the customer truly wants. Whether we want to admit it or not - we've all made this mistake.

As an example, you've probably been to a trade show where you found a great new widget that you really liked. Or maybe your supplier labeled it the "hottest seller on the market". So you were really excited and decided to order a whole bunch. But all too often, those widgets end up sitting in your store collecting dust because your customers don't have a need for them - even though you think they are really cool. This is where pride and personal taste can cost A LOT of money...

The truth is that it doesn't really matter what you like or what your suppliers try to push on you, the only thing that's important is what your customers want.

So how do you figure out what your customers really want?

Actually it's quite simple... every time one of your customers buys something from you they're voting. These votes are cast with their wallets. So it's essential for you to keep track of their votes and add them up. This will tell you what your customers really want.

Once you tally the votes, you're going to find that some items sell very fast, some items sell very slow, and some items don't sell at all. And unless you already keep track of this information, you'll probably be surprised by which items are moving the fastest. So it's extremely important to track and tally your votes!

If you identify inventory that's dead or moving slow, you need to put those items on clearance and get them out of your store. That's right. Take the loss and get them out fast - so you can get something in your store that will make you money.

Now it's still important for you to find new merchandise and constantly test new products to see if they sell. But before you decide to order new merchandise, ask for the market data on the item so you can see how well it's selling and make a decision from there. If they turn out to be great sellers, then you should consider stocking that item on a continual basis. If the new item doesn't sell, put it on clearance and get it out as fast as you can!

You might be wondering how you are going to keep track of all your customers' votes and calculate the totals in a timely manner. Well that's where a good point of sale system can be a lifesaver.

Since POS software tracks all your sales, you can easily pull up detailed reports that show you exactly what's selling and you can use those figures to properly stock the items your customers want. By using a POS system to track sales, you'll be able to keep your customers satisfied and now you can put the money that's normally locked up in dead inventory to good use.

To your success.

Bob Twain

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