Retail Inventory Management
When working in retail inventory management, keeping an accurate count of your product and maintaining an organized item inventory is essential. Making out timely orders and maintaining regular deliveries is also important, so your inventory neither gets too low and forces you to lose sales, nor your inventory builds up too big, threatening you with an expiration date crisis, as well as time lost moving around excess product that's in your way.
Floor managers need to be part of the process of ordering new inventory, even if they are only consulted. Good communication about poor sales from all your staff is important, to avoid inefficient new inventory orders. Beyond good communication and smart, informed supply orders, here are some other tips for retail inventory management.
Retail Inventory Management System - Ordering
Get a retail inventory management system that supports ordering in place that allows for precise ordering of sales items. If the person ordering the inventory doesn't work the items onto the sales floor himself or herself, have this person consult with the manager in charge of the sales floor before every order. This allows communication, so you don't double-order items that aren't moving quickly or selling well out on the floor.
One major problem with many backrooms is that stock begins to build up of products that aren't selling. I've noticed that, when the person ordering inventory is the one moving product onto the floor, orders are more accurate and tend to involve what you actually need. If that isn't the reality at your store, then have a system for tracking which items are selling well and need to be reordered. Over-ordering means your supply room is going to get overstocked, which makes inventory hard to keep track of.
Retail Inventory Management Software - Spreadsheet
If you don't have sophisticated retail inventory management software you can use a spreadsheet. It's an efficient way to keep track of sales and of specific items. Maintain a spreadsheet and track items periodically. Set it to show the best selling items and the worst selling items. This tells you what needs to be discontinued, and which items need to be moved.
Keep a High Percentage on the Sales Floor
Keep as much product on the sales floor as possible. The bigger percentage of your product is on the floor, the more efficient your inventory plan is, assuming your shelves are fully stocked. You want a lean and trim stock supply, without stock piled to the ceiling in the back of the store or warehouse, where it's hard to work.
Walk your store daily and notice which items seem to be selling. Take mental notes of the items that never need to be restocked. When you recognize items that aren't selling well, determine if this is a seasonal product or the product simply isn't popular anymore. In either case, move the product to a new location, to try to facilitate sells.
Rotate Inventory
A huge loss for businesses with inventory is items going "out of date". One way to avoid this problem is to rotate product often. When you stock new deliveries of product onto the sales floor, you don't want to simply replace what was sold with your new product. Instead, you want to place the product with the latest out-of-date numbers in the back of your display.
If you continue to place new inventory in the front of the display, you're eventually going to have a lot of product pass its expiration date, simply by sitting in a spot no customer is ever going to put their hands on it. The same thing goes for the back room. You want your newest product behind or under your oldest product in the supply room, so you place your oldest product on the sales floor first.
You might think this is a huge headache, to continually pull product from the back and place the new inventory behind it. If that's too much of a problem, consider pulling all your old product to one side of the display, preferably the one that gets picked from the most often, and building the rest of the display with the new product. If you have inventory that moves pretty quickly, this system works well enough, too.
Keep an Inventory Regularly - Periods and Quarters
Count your inventory regularly. Some business, a quarterly or twice yearly inventory suffices. In other businesses, having an inventory every "sales period" works better. For instance, I worked as the warehouse foreman for one of the major soft drink companies, and we had a new inventory period every four weeks. This meant 13 inventories per year, to keep track of exactly what we had in our warehouse.
The more often you count inventory, the more often you're going to be thinking about what sells best and what should be discontinued, or at least ordered less often. This is a good thing, because it forces you to make hard choices and to hold yourself accountable.
Retail Inventory Management Concerns
Things are never going to be perfect in retail inventory, but some retail inventory managers are better than others. The best retail inventory management requires attention to details and good communication. Even then, resupply isn't always perfect.
For instance, when I was a warehouse manager, if the central warehouse that supplied us with product was having a space crisis with an over-ordered product, we would sometimes get extra pallets of unwanted product, no matter what we put on our order. Someone else's problem became ours, despite our loud complaints. Only seldom did those complaints result in the product being shipped back where it came from - it was our problem.
That's going to happen to a retail manager sometimes, so you have to get used to it. What you can do to make those retail inventory problems more manageable, is to handle you own business. Keep a good track of your inventory needs, order exactly what you want, don't let salesmen talk you into something you know you don't want, and when someone else makes a mess for you, you'll be able to handle it.
In other words, in retail inventory management, the more problems you solve, before they become problems, the better retail manager you'll be.