Inventory, whether it be clothing, food supplies, or electronics is the lifeblood of any business. Not enough of the right product on hand and customers will spend their money at another store. Too much capital tied up in the wrong products, and the business owner won't have the flexibility to re-order what customers want. That's why inventory control is so important.
According to a management education expert in Entrepreneur magazine, "companies can increase profitability 20 to 50 percent or more through careful inventory management."
And using a point-of-sale system to manage inventory is one of the best ways to know what's selling and what's not.
Here are six strategies for better inventory control that your customers might not be using.
1. Treat every customer purchase like a vote
When a customer makes a purchase, he's telling the business owner that he likes what's available, and he wants that item to be available again. It's almost like casting a vote in a popularity contest. And business owners need to pay attention.
But it's impossible to keep track of that information without a computerized system. Maintaining an accurate, right-size inventory that contains items customers keep buying over time isn't easy.
That's why using a POS system for inventory control will tell you how much of each product you should be ordering, how often you should be reordering, and whether slow moving sellers should be replaced on the shelf.
2. Create purchase orders automatically
As inventory levels stabilize, use that information to automatically create regular purchase orders. Or use your actual sales history. Both strategies will save you plenty of headaches, and allow you to create the purchase orders automatically based on what's selling and what's not.
And with most POS systems, your purchase order can be transmitted electronically. Your ordering accuracy will improve, you'll save time, and you'll have the merchandise your customers want in stock.
3. Review the top 100 selling items regularly
These items are your bread and butter and are easily tracked via POS software. You want to make sure you're not ordering too many or too few of these best sellers. Having just the right amount in stock gives you tight inventory control and means you don't have too much capital tied up each month.
4. Track lost sales
Lost sales occur - when customers come in asking for a product, it's out of stock, you offer to place a special order, and they say no. That's when you can enter a lost sale in the POS system. Review monthly reports and you'll see how many sales you missed because a product was unavailable. Then adjust orders accordingly.
5. Implement an Open-To-Buy plan
OTB planning helps you stock the right amount, of the right products, at the right time. It's a forecasting strategy based on sales history, and essentially shows the difference between how much inventory is needed and how much is actually available. Many POS systems incorporate OTB planning as an additional feature.
6. Track special orders at the POS
Companies that special order items for customers need a routine tracking strategy. POS software will help you know what to order, and remind you which customer placed the order, so you'll remember to notify them when it comes in. Use this feature to increase sales and give customers what they want.
Incorporating just a few of these inventory control strategies will ensure you have the products your customers want at just the right time.
How do you use your POS system for inventory control?