One of the most important things a retail business should be able to do is to track the movement of goods into and out of inventory. At a glance, you should be able to see how many you’ve sold of each item, and how many are left. From there, you can not only satisfy your curiosity of what’s ringing up at the register. You can also make some very important business decisions.
Of course, it’s impossible to keep a sale-by-sale record like this by using a paper-based system. Even older cash registers won’t give you this level of detail. In an economy that loves to computerize and instantly track almost any kind of activity you want, point of sale software is a very effective way to get a quick profile of what your business is doing. Armed with that information, you’ll easily be able to handle some important decisions.
Keeping Data Secure.
Before you even consider what’s selling and in what quantity, think about security. Your system will handle a lot of transactions (you hope), and with that will come an immense amount of sensitive data.
You will have the credit card numbers, home phone numbers, addresses, and names of your customers. If you offer credit, you will also have social security numbers.
It bears repeating that the effects of a data breach with this information can be devastating. The customers can lose money, sustain credit damage, or even become victims of physical crime. Your business can see its reputation ruined and be out large amounts of money for credit monitoring services for the victims, and you can face civil or even criminal liability.
So before your workers are swiftly scurrying about the store with a tablet, make sure that the entire system is ironclad and up-to-date.
Responding To Big Sellers.
Fast-selling items can make or break your store. If you are able to keep an adequate supply on hand, the customers will continue to pour in. Most likely, they’ll pick up accessory products or other goods while they’re in the store. Then they’ll go out and tell their friends about their positive experience at your establishment, and the snowball will grow.
Of course, the snowball can also run over you if you aren’t prepared. If an item begins selling like the proverbial hotcakes, you need to know it. You need to be able to see that they are rolling out the door quickly, and you need to be able to get more of them into inventory before the shelves go bare. If you miss an opportunity to replenish, you will see disappointed customers walk out the door empty-handed–and they’ll fill those hands with a competitor.
It isn’t just about having more in stock, though. It’s also an issue of purchasing power. If you are seeing big numbers of a product moving, you should be ordering big numbers. Bulk purchase of your inventory will reduce your cost, widening the profit margin on each additional unit you sell.
Responding To Small Sellers.
By the same token, you need to know when an item just isn’t moving. If you’re updating inventory on paper on a weekly or bi-weekly basis, you may not realize just how poorly an item is selling. You’ll continue to fill shelf space with a low-volume item, generating a big opportunity cost in terms of better-selling items that could have been in that space instead.
Keep in mind that the stagnation of a single product does more than just sacrifice revenue potential from that particular rack or endcap. Shoppers who come in and wander past lots of retail space filled with things they just don’t want are unlikely not only to buy anything, but also to return later in hopes of a better selection. That can generate a negative image with your customers.
You must have the popular, current items in clear view, and save only the lowest-valued space for that occasional customer in search of an obscure item that you still stock.
Maintaining stock is a delicate balancing act. Carry too much inventory and you’re increasing storage costs; too little, and you risk running out. Your strategy for walking this tightrope is up to you, but the only way you’ll make a good decision is with good information.