Inventory Management 101: Techniques to help you stay on top of your stock levels
We all wish our jobs were a little easier. If shelves would stock themselves and customers loved everything we sold, life would be coming up roses. By introducing technology into your small business, many processes that take up a ton of time can be automated and made more efficient.
A huge factor in why POS systems (or Point of Sale systems) are so beneficial is that they help brick and mortar stores keep up with the evolution of how consumers are shopping. Keep reading to find out why accurate inventory is so important to keep up with today's consumer as well as tips on how to make the automation process painless.
Why accurate stock is now a requirement
Confidence in your stock levels is more important than ever to keep up with how shopping is evolving both on and offline.
- Shopping trends are changing rapidly and increasing your online visibility is key to staying on top them.
- Online searches for local businesses and products 'near me' are growing at 146% per year.
- 76% of these searches from a mobile phone lead to a next day business visit
- You can create an opportunity to bring these ‘new’ types of customers. Approximately 28% of people searching with the term ‘nearby’ intend to make a purchase within 24 hours.
- Having an accurate inventory means customers gain real-time knowledge of your stock and have greater confidence buying from your store.
- A POS connection simplifies the process of bringing your products online by linking them to your NearSt shop page or your own website, saving you the effort of manually entering product information one-by-one.
Practical steps you can take towards maintaining an accurate inventory.
1. Understand the current status of your inventory.
Get a regular snapshot with cycle counting
The feedback we get from our shops is that maintaining an accurate inventory is a major issue. Because it’s dependent on so many factors, losing track of stock numbers can happen quickly.
While stock-takes require a large investment of time (and invariably happen less than they should), you can still get a regular snapshot of your inventory by using cycle counting;
Select your 100-200 most popular products
Count their stock levels
Compare it to what you have on file
Note your accuracy as a % (i.e. 180 correct of 200 = 90% confidence)
Since these are the products changing hands the most, they’ll act as a good bellwether for the rest of your stock. Because it’s a small sample, you can check it quickly and regularly. This will make spotting any declines in accuracy easy, and make them simpler to correct before they become a bigger issue.
2. Do an initial clean-up of your stock
Whether your initial sample check passes with flying colours or indicates low stock confidence, at some point you’ll need to complete a stock-take and clean up. There are a few ways to make this processes easier though:
Create a system and stick to it
Start from one end of the store and work your way over. Break up your inventory check into a week's worth of smaller tasks instead of trying to accomplish everything in one day.
Choose the right “counters”
Counting each individual product and recording it can be a tedious task. This makes it imperative that you choose a team of “counters” that have an eye for detail and are familiar with your counting system.
Consider using tech to speed up the process
If you’re looking to simplify the process even further, you could consider using tech to aid with your inventory counts. Meant to cut down on the time it takes to re-enter product counts from paper, most POS systems have the features needed and/or are compatible with barcode scanning applications.
3. Maintain inventory accuracy
Achieving accurate and reliable stock levels all depends on how well you maintain it. As with all good housekeeping, little and often beats a huge clear-out every time.
Four easy ways to keep on top of stock:
Schedule it - Be sure to count your inventory on a regular basis, it's better to do it outside of your opening hours. Cycle counting will help making this a regular habit much easier, and reduce the need for all-day (and night?) stocktakes!
Prepare materials and procedures - Do you plan on scanning barcodes? Printing out a count sheet and entering numbers manually? Make sure you have your method prepared ahead of time so everyone can get started straight away.
Start counting - It may seem like obvious advice, but sometimes the biggest obstacle is just getting started. If you have a large amount of stock, enlist help from your staff. Having steps 1 and 2 already in place will make this much easier for everyone.
Compare your results - Pull up your system data and see how your numbers stack up to what you have on file. Be sure to record the results somewhere you can easily refer back to (a simple Excel sheet with dates and accuracy levels is a great start). It will make spotting changes in stock and catching things early that much easier!
Perfect stock might be an impossible goal, but by understanding your current stock accuracy, taking the time to do an initial clean up, then creating a simple system to maintain accuracy you can keep on top of your inventory.
As shoppers increasingly expect “live” views of what’s on your shelves, having confidence in your stock will put you on the front foot to meet and exceed their expectations.
If you feel as though you need extra help in improving your stock accuracy or deciding on a POS system to work with, let us know! We currently support multiple POS systems and can connect you directly to the one that would best suit the needs of your business. Just hit us up at firstname.lastname@example.org with any questions or comments!
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