Whether you are a large or small business, you need cost-effective inventory management to optimize your profits. Overstocking means increasing your carrying costs as well as spoilage of goods that expire. Understocking leads to stock-outs which are detrimental to your customer service.
Replace manual inventory control methods with a POS with built-in inventory management. You will also cut back on the time, cost and effort of inventory management, not only saving valuable resources but freeing you to focus on other important aspects of your business.
The rise of omni-channel shopping is also directly linked to your inventory management capabilities. Consumers now want information on product availability to make their buying decision and often will go to an online competitor who has inventory you don’t. In fact more than 70% of retailers state that they must introduce omni-channel solution, including inventory management, to provide a seamless customer experience. Inventory planning is key here, with 68% of retailers saying their top priority is to provide the ability to buy online and pick up in store.
Have these concerns in mind when you buy or upgrade your POS. A legacy system with no or very little inventory control puts you at a distinct disadvantage in handling costs of operations and rise of omni-channel shopping.
One of the key benefits to an advanced POS system, such as Vexilor, is that it automatically tracks sales and inventory data. To maximize your POS investment you should learn how to use that data to improve your store operations and make more profit.
Here are some key tips.
Base Decisions on Data
You have five key decisions you can make in regards to your inventory. Should you; mark up, mark down, buy more, buy less or do nothing? Don’t make these decisions on instinct alone. Use the data mined from your POS instead.
As a starting point use your POS to generate your Key Performance Indicators (KPI) and then apply formulas to get key information. For example you can use your POS to understand your turn. Turn is a measure of how many times your inventory is replaced in a year. Turn is usually increased by reducing price but this can reduce profit. Turn is important because reaching a balance between the right turn and the proper profit margin. To get your turn divide your annual sales by average inventory (average inventory could be 100 pairs of sneakers stocked in a year for example – again your POS should be able to get this info for you). This is only one metric you can control using POS data. Others include stock to sales ratio and gross margin return on investment.
Set Objectives for Your Inventory
When buying merchandise set objectives for it and then use your POS to track whether these objectives are being met. For example if you are buying the latest style in stiletto heels then set a reasonable target on how many pairs should be sold within a reasonable time frame. This could be to sell 10 pairs of heels in the first two weeks for example. With Vexilor POS you would then track whether this particular inventory depletes during the first two weeks with data coming to you even if you are off-site, for one or multiple stores in real time. As such you can make important decisions on whether to mark down and assess product popularity right away.
By setting inventory item objectives you foster intelligent and targeted product buying and exact tracking of product success.
Taking bi-monthly or even bi-weekly inventory counts may be a thing of the past as more and more retailers are choosing modern POS systems such as Vexilor which provide continual and real-time inventory reports. Know what your competitors are doing for inventory management and follow suit.
But it is important to know what to watch out for in regards to inventory – do not just take stock of what is running low.With Vexilor you can find out these important inventory types.
Find out about slow sellers which have been sitting in inventory for a long time. Consider putting these on sale to deplete them and make room for faster-selling items. Also keep track of items selling well with low stock balances and identify a desirable reorder time. Also identify hot items for which sales have increased and put in a special order to deal with the selling surge. Remember Vexilor can automatically reorder inventory if it falls below your desired thresholds. At the end of the tax year it is essential to take account of final inventory activity as this is the annual physical inventory.
The right POS will help your business get key inventory metrics making it easy to meet customer needs – which is the key to growing a successful business. Overall, when evaluating your next POS, look for systems that not only give you the data you need but have built-in tools that take care of managing inventory for you.
Contact Givex for more information on Vexilor POS.