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Do you want to increase cash flow?

Your cash flow and profitability depend on inventory productivity (i.e., does it sell or not and how fast). If you can improve this value, you can improve the profitability of your store. So, what can you do to improve your inventory productivity?

Analyze product performance

As a general rule, you can improve your cash flow by 1% for every 1 week of improvement you achieve in inventory turns. Turns are the rate at which inventory is sold within a certain time frame. This is an important indicator of how efficiently a product is moving through a sales cycle. You can use turns to discover what products sell most quickly and make you the most money (note: products selling at a faster rate usually sell at full price and higher margins). On the flip side, slow inventory turnover is an indicator of lost opportunity.

Here’s how to improve your inventory turn rate:

  1. Analyze your turn data at the class, brand, and product levels to identify inventory performance
  2. Mark down stale products to sell them quickly and make room for better-performing products
  3. Invest your cash into high productivity classes, brands, and products
Making these decisions will improve your inventory productivity to increase cash flow. What would it look like if your business could increase overall inventory turn by shaving off just one week off inventory age? Find your potential cash flow increase:

Total number of sales X .01 (1% improvement from 1-week turn increase) = cash flow increase

 

That’s a powerful number! RICS system provides turns, return on investment, and gross margin rate of investment on our sales reports so you don’t have to mess with calculating it yourself.

No more guesswork, no more hunches.

Get control of your inventory to increase cash flow. Need more help? Click below to register for our upcoming webinar or check out our guide, Cash Flow: How To Use Inventory Management to Make More Now.
Register for our upcoming webinar It’s almost that time again… all the kids are heading back-to-school in August and you have an opportunity to end summer with a bang by hosting a back-to-school event! Now is the time to start planning. Not sure how to start? Here are 3 tips for hosting a profitable back-to-school event.

How to host a back to school event?

1. Promote with a purpose

Use your customer list to invite loyal customers to your back-to-school event. Make the coupon or invitation specific to your customer segments (2-4 customer groups). If you haven’t already, consider a Frequent Buyer program to maintain customer loyalty. Start promoting the event 2 weeks before to ensure you give your customers enough time to mark their calendars.  Connect with customers through their preferred communication channels (email, text, social, etc.). Examples include having an event hashtag on Twitter, creating a Facebook event to share on your page followers, and posting a photo to Instagram with the event details. Post about the event on social media during business hours for optimal visibility (consider Hootsuite to automate the posts).

2. Utilize data on inventory transactions

Analyze the previous performance of your products.  What products sold well last year? Which ones are stale on your shelves? Do some sell no matter what? Use this information to arrange your store. For example, move the stale product to a prominent display or out onto the sidewalk. Stock up on well-performing products or consider moving them to the back of the store. This means your customers will walk past other products to find what you already know they will purchase.

3. Consider an additional POS

Long lines are discouraging, so enable a temporary POS to get through a spring sale or just a couple of busy months to ring out customers quicker. This will reduce tension and frustration in the store, providing a more pleasant shopping experience. It will also allow you to sell more in less time.   Now you’re equipped to host a profitable back-to-school event. Want ideas for other events to bring in customers? Well, the good news is, we’ve put together a calendar of monthly occasions that you can add to your marketing plans to attract more customers.