Every retailer needs to meet the retail challenge and that challenge is more evident in inventory management than in any other facet of retail sales.
Balancing the need for an inventory that keeps people coming in to buy and interested, with stocking top selling items is no mean feat. Your fast-moving products usually account for about 20% of what’s in your stockroom. The other 80% requires a watchful eye.
Let’s talk about how to reduce the negative effects of slow-moving inventory, to keep your stockroom dynamic.
Tracking is key.
We don’t have to tell you that keeping track of what’s in the back room is key to effectively managing inventory. But allocating staff time to do so is a challenge.
Knowing what’s not moving is key to this project. Once you’re aware of that factor, you can start with periodic checks to ensure you’re on the right track, where slow-moving product is concerned.
Once an underperforming stock item is identified, your job is to figure out how to reduce the effect of having it on the shelf. Are you going to re-market it as something desirable, with an innovative campaign to move it? Or are you going to recycle it as a gift to loyal shoppers, or as a co-op promotion?
Having strategies in place to move inventory that’s not moving itself is key to maintaining space for that 20% of top-selling inventory. Perhaps it’s time to introduce automation that helps you see problems coming without having to resort to complex inventory regimes.
Key moments to move it and how.
Excess stock becomes most evident at the end of seasons and at the beginning of the year. These are crucial times for you to act to reduce their impact on storage space and cash flow.
Even if you need to move these items at major discount, having the cash from those sales is more beneficial than stocking them at a loss.
If stock has been lying around for over 3 months, you don’t want it around anymore. It’s time for a sales event, or a special offer. Clearance sales are an ideal way to get that stock out of the back room, converting it into cash.
Following a season like summer, move those bikinis, shorts and sunglasses with an end-of-season sale. Use social media to spread the news. If you run a loyalty program for your diehard customer base, let them know first. Offer discounts for Facebook shares and watch your store fill up with people ready to buy excess stock.
Creativity and process is how you reduce the negative effects of slow-moving inventory. Excess stock happens to every entrepreneur who ever went into retail. It doesn’t matter how carefully you plan, it’s just a part of the brick-and-mortar life!
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