Over the past several years, the quality of POS solutions has improved tremendously. And with it, so has the ability of business owners to learn how to improve inventory management. This includes tracking sales of items and getting a better idea of what needs to be stocked and what doesn’t.
Before that, most companies tracked inventory manually. A lot of those methods did work, to an extent. Unfortunately, they weren’t very efficient and didn’t provide much information about what was actually happening with a company’s products.
Today’s best inventory management software is efficient, simple-to-use, and provides you with all of the information you need to take control of your products. It shows you how to improve inventory management by helping you make informed decisions about what to do with that inventory.
How is Inventory Categorized?
To provide maximum flexibility and reporting options, inventory items can be placed in different categories (e.g. Brand, Department, and Product Type). Not only do these classifications help you find items quickly, but they are also extremely useful when trying to discover what products are doing well, and which are under-performing.
It’s great to know which specific items are selling the best, but knowing how brands, departments, and product types are performing as a whole, also provides important big-picture information about your company.
Brand Analysis
Using brand data, you might learn that in the past 9 months, people have almost completely stopped buying products from Brand X. Maybe the company has just recently developed a bad social reputation. Or maybe the quality of their products has dropped significantly over the past year. Whatever the reason, you’ll probably want to include less of these products on your next purchase order.
At the same time, you also learn that sales of Brand Y have been steadily increasing over the past 5 months. Because you’ve noticed a lot of more of their ads on TV and even heard your teen-aged daughter talk about their products, you had a gut feeling that this brand was growing. But now you can actually see the results on paper (or on your screen). If people come into your store and demand that brand of product, you want to make sure you have it.
By providing this simple information and allowing you to make new discoveries about your products, the software has shown you how to improve inventory management.
What Do Departments Tell Me?
The department classification gives you a good idea of how specific product lines are performing. It’s safe to say that in 2016 if you had a VCR department, your sales numbers would be non-existent. With an inventory system, you are be able to recognize the decline of a product line before it’s too late. And you can avoid having a large quantity of items that no one wants just sitting in your store.
Any Other Options?
Grouping items into product types also helps you quickly offer alternative items to your customer. Bill, a customer who has been shopping with you for years, comes in looking for a bicycle. He tells you what type he would like and a general idea of how much he would like to spend on it. Because it is a popular model and has nice margin, you first show Bill a brand new model you just got in.
He doesn’t like it. And after showing him a couple of similar bikes, he decides that he doesn’t want any of them either. So what do you do now? Since items with the same product type are usually similar in features and price, you can quickly look up all of the items with that price, and find one that will make Bill happy.
As a store owner, managing inventory is one of the most important jobs that you have. It can also be one of the most difficult. But with good software, it doesn’t have to be. You can learn how to improve inventory management and ultimately master it. Used correctly, inventory control software will help you learn more about your products so that you can make decisions that will bring the most benefit to your company.