Inventory is what makes your business run because it’s what your keeps your customers coming back. How do you know if you are making the right decisions with your inventory? Here are 4 of the biggest mistakes that retailers make in regards to their inventory:
Too Much Inventory: Yes, it is possible to have too much inventory. If you have too much inventory on-hand, it can tie up cash flow. How can you determine if you have too much inventory? Data! Knowing your sales performance of certain styles, vendors, and classes will help make sure you have the right quantity.
Not Enough Inventory: Again, use your data! You want to make sure that your inventory is correct and that you are evaluating the sales performance on all of your items to make sure that your shelves are stocked with the right product that your customers want to buy.
Pricing items correctly: This again comes down to data. Being able to see the first and last date of receiving of your inventory and the age of the product will help determine the markdown strategy to put in place to either sell more of an item or to get rid of an item to help free up cash flow.
Making buying decision on the fly: This happens all the time – you think you know your business and you buy what you like or what your sales representative says will sell. Data, once again, is your friend. Seeing the Turns, ROI, and Open-to-Buy will help you determine what is profitable, what sells, and how much money you really have to purchase those items.
Having the right tools to help evaluate these parts of your business are very important for making the right inventory decisions. RICS Software can help make these important business decisions with our robust reporting options. Click here to learn how.
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