Poor Inventory management is the key reason why most retail businesses fail. Poor inventory management can lead to understocking and overstocking, which can harm a business and its operations. 

Proper inventory management, on the other hand, can help boost sales, cut down expenses, and keep customers happy. If you are planning to set up a retail business, then having proper inventory management skills and knowledge is crucial for business success. An apparel management course can help you learn about brand management,  product sourcing and improvement, developing business plans, marketing tactics and more.

What Is Retail Inventory Management?

Proper inventory management involves ensuring that the store has enough merchandise that customers want. The number of items on hand is neither too much nor too little. By managing inventory effectively, retailers can meet the demands of customers without carrying excess items or running out of stock

The benefits of effective inventory management are many, some of the most notable benefits include:

Meet Customer Demand

Retailers who simply order fresh inventories without considering customers’ demands can end up with product surpluses or shortages. Effective Inventory management can help retailers to forecast customer demands and effectively drive sales. 

Better Cash Flow

Good retail inventory management can also result in better cash flow. Retailers can save money in various ways, by improving demand forecasting, reducing error and dead stock, and making informed decisions.

Customer Satisfaction

By enabling retailers to give customers what they want and when they want it, retail inventory management contributes to higher customer satisfaction. This also helps in building a strong relationship between the retailers and their customers. 

Important Tips To Manage Inventory Effectively In Retail Stores

Inventory management involves developing a system to source and receive products, check sales and manage the flow of products. Here are important inventory management tips that can help retailers have a better inventory management system.

Consider Stock Location

If you have set up your retail store in just one location, recording the location of your inventory is pretty straightforward. You can either put up the items on display or store them in the stockroom. However, retailers with multiple stores and omnichannel sellers might have inventory placed in various places like distribution centres, warehouses, and stock rooms. 

Having multiple inventory destinations can lead to overlooking or misplacing products. This can also result in misplaced sales and loss in revenue. Proper Inventory management can help prevent this. Consider using labels and barcodes that can contain department and category codes to partially or fully automate the mapping of the inventory.

Do Regular Stock Counts

Check and count your inventory from time to time to ensure it is accurate. Take accounts of damage, shrinkage, and defects and return products to avoid errors. 

This practice helps you identify and fix issues that could impact your business performance and allow you to understand how well your retail store is performing in terms of generating sales and revenue. By identifying the areas for improvement, you can take the right step toward fixing issues and improving the overall performance of your store.

Track Your Sales

Effective sale tracking involves more than just simply noting down the number of products sold at the end of the day. It is important to analyze and understand what types of items and how many are sold daily. In addition, you need to understand when certain items drop off or sell faster and what season or a specific day or month certain items sell. Recording not just the total number of items sold, but understanding how and when items sell is important for keeping your inventory under control. 

Check Your Supplies

If your supplier is frequently short with the orders or habitually late in making the delivery, it can cause problems in managing your inventory. Any supply error can result in overpayment to vendors, stock outreach, and deadstock. Make sure to check delivery against the purchase and verify that the contents match to order. Count pallets and cartons and confirm product numbers and types, noting down damage, mistakes, or any shortfalls. Feel free to discuss any issue with your suppliers regarding the supply. 

Keep a record of returns and defective stocks

Without a proper procedure to handle customers’ returns, there is a risk of holding unsellable items and missing the opportunity to put sellable items on display. So, when a customer returns an item, make sure to check if the item is defective or damaged and route it to repair, return or right off to the supplier as appropriate. If the item is sellable, add it to the inventory count and display it in the right place. 

Handle Dead Stock

Excess inventory can cause store space and increase product waste and loss. Deadstock includes incorrect deliveries, damaged items and leftover products. As a retail manager, you should create a proper procedure to maintain your inventory and prevent overstocking of products in the store. 

Record dead stock items and remove them from your inventory. Store those items in a designated place and manage them regularly by either donating, selling them to outlets, recycling or disposing them, depending on the products.

Effective retail inventory management plays a huge role in determining business success. If you are looking for ways to manage your inventory and retail business better for more revenue growth, consider the above comprehensive and actionable tips. Following these tips can help you plan an effective inventory management system to take control of your inventory. 

If you are interested in supply chains, store management and related courses, join the fashion designer course course at JD Institute Of Fashion Technology to enhance your skill and knowledge to efficiently manage your retail store inventory. 

This course provides holistic industry-oriented training to students, who want to develop in the field of marketing and merchandising. In this course, you get to learn about a wide range of processes involved in the retail industry including product sourcing, monitoring quality control, assurance, marketing and many more. To know more about the apparel management course and other relevant courses visit JD Institute.