Whatever the size of your retail business, inventory management is crucial to controlling your supply chain. Getting this right is one of the fundamentals of running an efficient, profitable business. Whatever systems you have in place to manage your inventory and minimize loss, it is always a good idea to be thinking about how you can improve upon them.
The first thing to consider is how you are using technology. There are many ways you can utilize technology in your business, from shopper traffic counting and retail analytics to sophisticated point-of-sales (POS) systems and beyond. Primary among them is inventory management software. This kind of software allows you to keep track of inventory at every stage of the production and retail process. When stock arrives, it can be easily scanned into the system, creating a record of its arrival. When it is ready to be put out on the sales floor, shipped, or sold, this information can also be recorded.
This allows you to keep reliable records of where your inventory is and how much you have. Doing so lets you see the state of your inventory, compare it to customer demand, and adjust your operations if necessary.
Using this kind of software also lets you visualize the ebb and flow of inventory over time. The data it produces can be used to track trends and maximize profits. Keeping track of trends lets you forecast and predict which inventory you will need, and when.
Seasonal trends, for example, commonly have an impact on shopper activities. A dairy is likely to sell more ice creams during summer, while a clothing store will sell more coats and jumpers leading into winter.
These are obvious examples, but there may be more subtle – yet powerful – trends at play in your business. By keeping good digital records of sales figures and reserve stocks, you can use that data to inform future inventory decisions. In turn, this leads to purchasing more of certain stock when you are likely to sell it, and purchasing less when you expect demand to dip. This maximizes both cash flow and storage space, and reduces losses on stock, which has a set shelf-life.
However, there is some need to exercise caution around cyber security when using technology in your business. It is unavoidable that if your business’ systems are networked, you are exposed to some cyber risks. This includes any digital inventory management systems you may use. Exposure of customer information and email-based scams are common threats for retail businesses. This can affect the operations and profitability of your company.
The good news is that you can minimize this risk by implementing procedures to avoid common kinds of attacks. Practice good digital hygiene by only installing software you trust on your business’ hardware. Likewise, install a reliable anti-virus software package.
Train staff to be vigilant in reporting anything unusual they encounter in your business’ online space. This could include emails from unknown addresses. Look into cyber insurance to cover any losses accrued as a result of cyber crime. The peace of mind that your business is covered in the event of a coordinated attack on your systems is worth the cost.
Inventory management is an important part of any retail business, big or small. Practicing good record-keeping helps maximize the efficiency of your stock. In turn, this increases cash flow and profit margins, and keeps any losses to a minimum. Using inventory management software solutions can streamline this element of your day-to-day operations. You can then use the reliable tracking of inventory and rich data it produces to further advance your business.
About the writer: Cloe Matheson has written articles on a range of topics including business, travel and lifestyle. When she’s not writing, Cloe spends her free time unleashing her creative side and working on art. Visit her personal blog to read more of her published work.
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