When it comes to efficiently running a fitness retail business, inventory management plays a major role. If you want to maintain your inventory seamlessly, then you need to be informed about your inventory turnout. Simply put, you need to be aware about how often your inventory has been completely sold out. Once you know the number of times your inventory sells in a month, you can order the right quantity of products to cater for your consumer demand. Inventory management helps you budget your operational capital and expenses. Mismanaged inventory can be quite problematic and lead to serious business losses.
Smart Inventory Management Tips
Following are some inventory management tips that can help you keep track of your budgeting requirements, making your fitness retail business run smoothly.
Less Is More
Overstocking inventory can be tempting. But it doesn’t help you combat the fear of being out-of-stock. Though buying in bulk can reduce cost per unit, it can also limit your cash in hand, restricting other business activities until your stock has been sold out. When it comes to inventory management, it’s not just the cost of the product, but the cost of warehouse, proper storage conditions, electricity etc. If lady luck doesn’t favor you, you might have to discount the product in order to get to avoid total loss.
To order the supply you actually need, you can refer to previous sales. You can also look at previous year’s monthly sales, looking out for insignificant features as well. If your retail is a new startup you can assess data from your competitors.
Track Inventory Efficiently
The moment you order for stock from your suppliers, you have to start tracking it efficiently. There are chances for miscounting at all steps from ordering to getting your products delivered at your doorstep. There can be some confusion while tracking your inventory once your products have been shipped, while fulfilling orders or even when your employees use them. Efficient inventory management requires you to track all products including damaged or broken items.
The best way to stay updated about your inventory is to use an electronic management system. Connect it to your point-of-sale software system to track your all merchandise without much effort, making sure that you have enough to meet customer demands.
Track To Boost Profit
Usually retailers are unsure which items give the most profits. They keep on ordering products that are costly and take too long to deliver, which aren’t popular amongst their consumers. Keeping an eye on your inventory’s turnout can help you analyze your customer’s favorites. This in turn shows which products of yours are creating most profits. Research shows that 80% of your business sales occur because of 20% of your products, so it’s good to focus on inventory and the products that account for most sales. Once you know which products are your best sellers, it’s time to focus more on those items, discarding bulking of items that do not sell.
Monitor Your Vendor’s Restocking
It seems too convenient to let your vendors re-stock your products. It is quite functional for you as it saves you a lot of costs and time. While it may save you from a lot of headache, if you don’t vigilantly monitor your vendor’s orders, there can be a lot of confusion regarding the quantity of inventory or merchandise loss due to negligence such as inaccurate counting. This can also lead to expired products on shelf due to lack of rotation.
This problem can be fixed as long as you keep a close guard of your vendor’s orders. You need to make sure that you are aware of every transaction and the products that go in and out of your business. Relying on a third party can seriously affect your profits, causing your business to dwindle.
Prepare Plan B
Imagine all the effort you will put in to efficiently track your inventory just to know that you lost it due to a little negligence. Since you are running a business, you need to be prepared for worst situations such as computer theft or a failed server. These are real-life situations and you should always have a plan B to deal with them accordingly.
To begin with your data protection, you should have a backup. You can use a hard drive, a Dropbox or even something as simple as a USB. You don’t want all the data that you worked so hard to gain, going down the drain.
