A constant challenge in any retail business is Inventory management. From how much products you sell to how much stock you purchase, every aspect of managing your inventory is integral to the success of your fashion brand.
Here are 5 tips to ensure you are on top of your game when it comes to inventory management.
- Find a Balance: Too little inventory will disappoint your customers, while too much inventory will tie down valuable funds, thereby hindering the much needed cashflow for your business. Finding the right balance with your inventory is the first step to profitability in your business.
- Identify, Categorise and Prioritise: The next tip is to categorise your stock. Find out the fast sellers (Group A) slow but essential items (Group B) and your seasonal stock.(Group C). Categorising your inventory will help you prioritise your fastest sellers(Group A) and know when to invest in seasonal products and slower items.(Group B and C). Fun-fact: Based on research, only 20 percent of your stock gives you the most profit in your business. The goal is to focus on these items ensuring that they are constantly replenished as opposed to constantly throwing money on all categories every time you are buying.
- Have a set process for Receiving Stock: You must have a set process for receiving inventory that must be followed through and through by your staff. Put together a team to ensure that all goods received are confirmed by more than one person, accurately counted by supervisors, and documented by an Inventory Manger. This will greatly reduce pilfering and ensure conformity to your standard inventory processes.
- Track, Update and Analyse: Once all data is properly collected and documented, what you do with this information is very important. Track sales to know your numbers and stock levels. Update your inventory sheets regularly and carry out frequent physical stock count to ensure sales and inventory levels correlate. Analyse Data to Identify Money makers, shelf life and buying trends. Data analysis will help improve the buying process and it will help you make smart data driven decisions.
- Invest in Technology: Technology makes the big difference. Once your business can afford it, a sales and inventory management software makes it super easy to document everything. Reports with sales and inventory analysis can also be automatically generated on demand making inventory management so much easier.
Still need help managing your sales and inventory? TALK TO CHEEKS!