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INVENTORY
your inventory is being sold faster and you have more cashflow in your business. A lot of people forget that the cost of inventory is not just the original purchase cost of an item. It includes the ongoing cost TO SELL that inventory. The longer it takes to sell something, the greater your real inventory cost as your money is sitting in that dead stock instead of products that are in high demand. 3) Determine your ideal Reorder Days. It is always a good idea to estimate the leadtime required to reorder products in time for suppliers to produce OR deliver them before you are out-of-stock. For example, if you know it takes two weeks to receive orders from a particular vendor, make sure to factor that leadtime into your reorder timing. In the beginning, you don’t want to cut it too close as unexpected delays can happen (e.g. snowstorms in the winter). This is especially true if you are ordering for a busy time of year such as Christmas. For some retailers, losing a week during the holidays might mean the difference between Christmas and Boxing Day pricing. A lot of small retailers or businesses often think that they are not big enough to use inventory management tools and try to use spreadsheets to keep track of their goods. While this can work in the beginning, as your inventory items grow in both size and attributes, you will either overstock (to prevent stockouts) or have constant back orders. You will also lose out on freight savings and volume discounts you might have received if you had consolidated your vendor orders more efficiently. Start managing your inventory by following the key essentials we’ve listed above. Then when you’re ready, consider using a system to automate these functions. With the proper inventory management tool, you will be able to spend less time managing your inventory and more time selling it. About the Author Karen Wong is a retail marketing and innovation consultant, strategist and writer. She has extensive experience growing businesses in Canada and East Asia. She’s currently based in Toronto and is the founder of ACE POS Solutions Ltd which offers full-feature retail pointof-sale solutions used by established retailers worldwide. LinkedIn
PointofSale.com | Summer ‘17 | 15