If you run a retail establishment with any amount of on-hand stock, keeping your inventory levels accurate is an essential step to keeping your business profitable. Knowing how those inventory levels change is important for understanding how much supply is needed to meet your customers’ demand.
But before you can really examine and analyze your product levels, you must be confident that you are working with an accurate number. While this may seem like an easy task, it’s surprising just how hard it is to keep track of your products.
While it is crucial to have a robust electronic inventory tracking system, such as Fishbowl, the following steps offer some simple non-tech ways you can maintain your inventory and make the entire process more reliable.
1. Track Your Product Throughout Its Lifecycle
It’s best to have a tracking system that makes it easy for you to gain an understanding of where your inventory is in your sales lifecycle. This means going beyond a shipping manifest or counting the number of boxes in a delivery. Open every box, and visually confirm the arrival of every item. Report any discrepancies to your supplier as soon as you note them, and make sure that your internal tracking system is set up to handle them. Even if your tracking system is as simple as a spreadsheet, the information it contains is what matters. But remember that it’ll only be as accurate and timely as the information you diligently input.
Of great importance is to always track how much is coming in and how much is going out. This can help you to quickly see if there is a discrepancy with your inventory counts and if you are short or have a surplus. If your numbers are off by a large amount, you know there is a problem, and you can start rooting out the causes right away.
2. Clear Out Your Stock Before You Count
In an effort to cut down on the amount of product they’ll need to count, some businesses choose to have a “fire sale” prior to doing a physical inventory. Many larger retail stores simply don’t accept shipments the week they’re slated to conduct inventory. Whatever method you choose, do all you can to keep stock levels low when you’re scheduled to begin your inventory process.
3. Enlist the Help of Your Most Meticulous Employees
You may not have a lot of options, but when conducting inventory, make sure to have your best and most detail-oriented employees on the job. Accuracy is key.
4. Map Out Your Storage Area and Sales Floor
It’s easier to count in small increments, so divide your sales floor and backroom into smaller sections. Next, create a pattern for how inventory will be conducted. You might start on the right side of the room and move counterclockwise, or you might choose to start at the back and work your way to the front. Whatever way you choose, mapping your floor makes it easier to double-check your counts, as you can assign your employees to distinct and manageable sections. A different employee can later be sent to confirm the count.
5. Do Not Move Product While You’re Counting
This is incredibly important, as moving product around might cause it to be counted twice or not at all. Once inventory begins, no product should be moved. If something is moved, a note should be included that clearly states what was moved, where it was moved and in what quantity.
6. Order the Right Supplies
Make sure you have sufficient supplies of necessary items to conduct your inventory. This might include clipboards, calculators, pens and pencils, and sticky notes for marking different sections or products. You might also consider ordering earplugs, as some people find it easier to concentrate when there is little ambient noise.
7. Start Tracking Discrepancies Right Away
As each section of the store or backroom is counted, you can start verifying each product count against its current inventory count. Note any discrepancies as soon as they occur, and have the inventory counted again if necessary. If you’ve never conducted inventory before, you may not trust the current counts you have for your in-store products. If this is the case, that’s fine. But remember that losing product, whether through theft or negligence, means losing money. Keeping track of your products is one of the simplest ways you can save your company money.
8. Conduct Inventory on a Regular Schedule
While some larger organizations find it impossible to conduct inventory more than once a year, you should be conducting inventory at least twice a year if you’re a smaller business. This will make your counts more accurate and should reduce the number of inconsistencies. Taking inventory more frequently helps produce historical data that you can use to identify sales trends and provide the insight you need to make better decisions with sales and ordering.
Conducting inventory on a regular basis with a carefully laid-out strategy helps to maintain accurate stock levels and greatly reduce the amount of revenue you lose to unaccounted inventory. It can also help you identify trends in product movement that you can use to schedule sales or wholesale restocking. Since it’s a necessary part of running a retail business, you might as well make good inventory management strategy work for you.