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Best Practices for Successful Retail Inventory Management

Posted by Sarah Kowalski on Mar 22, 2017
Sarah Kowalski

Inventory management is an essential part of running a retail store. Too much stock can lead to markdowns that can kill your margins but just as bad is not having enough merchandise resulting in lost sales, low customer satisfaction, and even a fall in customer loyalty. A best practice is to take a full store inventory count each quarter or season while a partial inventory count is recommended weekly or monthly. Use your point of sale inventory management software to help you confirm what is selling, what you may want to return to vendors or what to place on sale.

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Inventory Count:  First steps
To begin, schedule a date and time with your staff to complete the inventory count. Plan to have enough hands on deck to get the job done quickly and efficiently but keep in mind too many people can lead to miscommunications and mistakes so find the balance. If this conflicts with a staff member’s schedule, consider closing early but remember to inform your clients in advance! The optimal time to conduct your inventory count is before or after normal business hours when your attention is not drawn away from your clients. Also note, your inventory will be frozen during the time of the count so make sure everyone is aware that no transfers or purchase orders are processed in your POS. 

Inventory Count:  Prepare your store
Next, organize your floor into sections, departments and/or categories. Confirm that each item has a scannable barcode facing out and the item information is readily accessible for manual input if necessary. Pausing to look up this information can be a disruption in the process and slow you down. As the leader, you will be in charge of assigning tasks to each individual. Identify with your team the flow at which you want to count the items whether it is moving clockwise through the store or starting with backstock and finishing at the front of the store. Avoid jumping from one section to another. A printed copy of your inventory count procedure should be kept on hand to guarantee your staff is truly all on the same page. 

Inventory Count:  Time to count
With scanners in hand, you can begin making your way through each mapped section of the floor. Whether you are using an iPad and bluetooth scanner or a desktop computer, follow your map and stick to the plan while routinely checking your POS to confirm the items are being recorded properly in their assigned batch or group.

At last, you are done! Now, take a few minutes to review your item discrepancies. Viewing a report of your inventory quantites previous to the count and your actual number can identify problem areas including merchandise you want to move out, order more of, and most importantly, what data matches exactly what you have on your books. Apply this retail inventory management best practices routine in your store today to guarantee less dead stock and more cash in your pockets.

Want a more detailed overview? Check out this Springboard Retail knowledgebase article!

Good luck!

To learn more about modern retail inventory best practices, download our FREE inventory management report!

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Topics: Inventory Management, Retail Tips & Techniques

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