5 Ways to Control Inventory Levels
Product and inventory management is one of the most important aspects of running a successful and profitable retail chain. If you want to maximize profits, you’ll need to control your inventory. We offer these five inventory control techniques for free.
- Set minimum and maximum levels – You should take a fresh look at your minimum and maximum stock levels on an annual basis. Set your minimums and maximums and don’t let your inventory fall below the minimums or go above the maximum.
- Establish allocation protocols based on product sales – You’ll find that certain products will sell more at specific locations and other products will sell more at other stores. Order products for all of your stores at once to take advantage of discounts, but allocate your inventory based on sales of actual product at each of your stores.
- Buy the right products at the right time – To keep your inventory under control, you’ve got to buy the right products, but you also need to buy them at the right time. Purchase a product when the trend has died and you’ll hold onto the inventory. That will tie up your investments and cause you to lower prices to move product. Buy too early and you’ll hold your inventory longer.
- Stay within budget – Establishing an annual budget for your inventory will ensure you don’t overspend. This is particularly important for new retailers. Set your budget and stay within your budget. As your profits and ROIs increase, you can increase your annual budgets.
- Optimize replenishments – Keep you replenishments on schedule, and set your schedule so that you automatically replenishment your products before you run out. You should receive new product shipments before you run out of inventory and put it on the shelves as soon as possible.
To control your inventory, you’ll need a system that allows you to keep an eye on your products from the moment you order to the time you sell them at the POS. You need a retail management system designed to keep your inventory under control.