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ItÌýdoesn’t matter how big orÌýsmall your retail operation is, proper inventory management isÌývital toÌýsuccess. Having anÌýappropriate inventory management technique that allows you toÌýtrack inventory across virtual andÌýphysical stores isÌýnecessary ifÌýyou have multiple locations asÌýwell asÌýanÌýecommerce site.

All ofÌýthese sales andÌýinventory control procedures need toÌýbeÌýlinked together forÌýaÌýseamless inventory control management system.

Being sure ofÌýinventory accuracy can also beÌýaÌýjumping off point forÌýother related initiatives.

For example:

• You’ll have aÌýmore effective supply chain process that takes your sales andÌýcurrent stock levels into account.
• You’ll see anÌýincrease inÌýcustomer satisfaction shown inÌýtheÌýform ofÌýrepeat business, positive reviews, orÌýword ofÌýmouth (including social media).
• You will beÌýable toÌýlower inventory cost ofÌýraw materials with more accurate estimates ofÌýneeded supplies corresponding toÌýtheÌýcurrent demand.
• Having inventory processes toÌýdecrease excess inventory andÌýdead stock save theÌýcompany thousands inÌýstorage costs forÌýstock that isn’t moving.

ItÌýwill beÌýeasy toÌýsee when your inventory control systems are working properly, andÌýthat your inventory control procedures are being followed byÌýall staff with related tasks. The biggest measure ofÌýsuccess isÌýanÌýaccurate economic order quantity.

Economic order quantity isÌýanÌýelusive number that varies greatly from business toÌýbusiness. ItÌýmight seem unattainable, but with proper inventory control management itÌýisÌýpossible. Essentially, this isÌýtheÌýoptimal quantity that you should buy when ordering from your suppliers, andÌýitÌýisÌýbased ´Ç²ÔÌýtheÌýtotal costs related toÌýbuying receiving, merchandising, transporting, andÌýholding inventory.

Inventory Management Best Practices

Each company will need toÌýdevelop their own inventory management processes based ´Ç²ÔÌýtheir consumer demand, competitive landscape, seasonal sales, forecasting, andÌýother product/company details. However, there are some benchmarks andÌýpractices that every retailer should strive toÌýmeet when developing their inventory control procedures template.

• Keep anÌýinventory ofÌýsafety stock ofÌýyour most popular items. You’ll want toÌýbase theÌýsize ofÌýyour safety stock ´Ç²ÔÌýyour average sales, whether orÌýnot theÌýproducts are seasonal, andÌýwhat you will doÌýwith theÌýunused inventory.
• Use aÌýkitting approach, also known asÌýbundling, toÌýincrease average order size andÌýsell off more excess stock. You can increase total order sales andÌýdecrease storage costs with these bundled deals. BOGOs fall under this category ²¹²õÌý·É±ð±ô±ô.
• ToÌýkeep storage costs toÌýaÌýminimum have anÌýinventory control procedure inÌýplace toÌýaddress mark downs andÌýwhen toÌýmove inventory toÌýdead stock.
• AÌýseparate set ofÌýinventory control processes should beÌýused toÌýaddress dead stock andÌýhow itÌýwill beÌýdisposed of. Consider eco-friendly options like recycling, donation toÌýaÌýnonprofit organization, orÌýdonation drives.
• You should conduct basic inventory audits andÌýreview them inÌýconjunction with sales reports atÌýleast once per quarter. You should also have anÌýoutside third party inventory audit done atÌýleast once per year, depending ´Ç²ÔÌýtheÌýsize ofÌýyour business andÌýsales volume.

Finally, you should use aÌýpre-developed inventory control procedures template toÌýintroduce your new inventory control process. Using aÌýtemplate will allow forÌýeasy updating asÌýyour business andÌýinventory needs change. You can then distribute this document throughout your organization soÌýthat everyone isÌý´Ç²ÔÌýtheÌýsame page.

Typical Inventory Control Procedures

There are some inventory control procedures that every retail business ofÌýevery size must have inÌýplace. These are theÌýminimum requirements that you should look forÌýinÌýaÌýnew inventory control solution. Your inventory management software should integrate these features forÌýaccurate inventory tracking with minimal time andÌýeffort beyond setup.

• Balance inventory ´Ç²ÔÌýaÌýschedule based ´Ç²ÔÌýaverage stock turnover rates, atÌýleast every 2ÌýtoÌýthree months. ItÌýcan beÌýaÌýgood idea toÌýmake this part ofÌýyour normal quarterly bookkeeping.
• Review previous sales records toÌýidentify popular, andÌýunpopular items. This should beÌýdone atÌýabout once per season, andÌýhelps you know what toÌýdiscontinue andÌýhow toÌýprepare forÌýconsumer demand inÌýtheÌýfuture.
• Have aÌýdefined life cycle forÌýyour products. AtÌýwhat point isÌýitÌýnoÌýlonger practical toÌýpay forÌýtheÌýstorage costs ofÌýexcess inventory. Know what that point is, define it, andÌýincorporate itÌýinto your overall inventory control strategy.
• Proper inventory control procedures must include aÌýplan toÌýreduce shrinkage. Shrinkage refers toÌýlost inventory through returns, defective products, shoplifting, andÌýinternal theft. ItÌýcan also refer toÌýraw materials that are wasted during manufacturing.

What toÌýLook For inÌýInventory Control Software

Especially ifÌýyou are aÌýsmall business, being able toÌýautomate asÌýmuch ofÌýyour processes asÌýpossible helps you reduce labor costs asÌýwell asÌýyour reliance ´Ç²ÔÌýsomewhat costly service providers. Every inventory management system should include product locations andÌýitem quantities, synched andÌýupdated across sales funnels. However, toÌýget theÌýmaximum benefit ofÌýyour inventory control software you’ll want toÌýlook forÌýthese key features.

• Ability toÌýbundle products orÌýmark down products that are not selling asÌýwell toÌýdecrease excess stock andÌýunload dead stock.
• Intuitive reports that show your best andÌýworst selling products
• Store inventory control procedures should align andÌýsync with ecommerce endeavors forÌýeasier andÌýmore efficient supply chain management.
• Automate inventory control processes toÌýfacilitate growth with fewer resources andÌýmanpower

IfÌýyou want toÌýautomate all ofÌýyour business activities, itÌýisn’t hard toÌýdo. You can connect your ºÚÁÏÃÅ store with many ofÌýthese items handled inÌýanÌýall inÌýone management software. This makes combining sales andÌýinventory data forÌýbetter insights andÌýmore effective inventory control solution.

Like anyÌýother plan you put into motion, you should have clear KPIs toÌýmeasure theÌýsuccess ofÌýyour inventory control program. Look forÌýinventory management systems that allow you toÌýcustomize andÌýtrack these KPIs asÌýthey apply toÌýyour business.

Ìý

• Edit Products inÌýBulk
• Everything You Need toÌýKnow About Inventory Management Software (+ÌýTop 5ÌýBest Solutions)
• Inventory Control Procedures: How toÌýControl Your Store Inventory
• SKU Explained inÌýSimple Words
• How GS1ÌýGTINs Can Power Your Ecommerce Business
• Forecasting Demands: Strategies toÌýAvoid Stockouts andÌýOverstocking
• Finding theÌýOptimal Way toÌýStore Your Products
• How toÌýOptimize Inventory Levels Without Sacrificing Sales