fbpx To adapt to the changes in today’s retail landscape, it is important to back your business decisions with data.  Knowing the right inventory performance metrics to evaluate and what they mean will allow you to make educated business decisions to improve your store’s inventory performance.

Make sure you’re evaluating these 3 important inventory performance metrics:

  1. Look at your Sell-Through – This is the percentage of sales to the inventory investment available for sale. The formula measures how much or what percentage of your total available inventory was sold during a given period. For instance, if you had two items for which you had received 10 pieces of both and had sold 6 pieces of both, the sell-through percent on both items would the same at 60%. But if one of these items had been in your store for 12 months and the other item in the store for 1 month, the second item is much more profitable for your business than the first, even though the sell-through is the same.
  2.  Evaluate the Return On Investment (ROI) of Your Inventory – For every dollar you invest in a product, how many are you getting in return. ROI analyzes inventory levels, sales, and profitability by comparing the investment in inventory required to generate those gross margin dollars. A high ROI indicates that you have the right amount of inventory, at the right time, for the right price. A low ROI may indicate that you are missing out on sales opportunities and leaving money on the table in the form of old inventory or excess markdowns.
  3. Understand the Gross Profit Margin (GP) of classes/SKUs/vendors – GP measures the percentage of your total sales dollars that are profit dollars. The GP percentage is relative to the cost of the item as well as the selling price. A higher GP percentage indicates that you are selling your product as close to the original retail price as possible. A lower GP percentage may indicate excessive markdowns for products driving down profitability.
Without the data, it is difficult to accurately know your success. The more insight you have, the better equipped you are to make informed decisions so that you can be a profitable retailer.   [vc_row][vc_column width=”1/1″][minti_testimonial author=”Joey Pointer” company=”CEO, Fleet Feet”]”We rolled out an ecommerce platform and we wouldn’t have been able to do it without RICS.”[/minti_testimonial][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]At RICS, we support retailers integrating with new solutions to help grow their business. We’ve integrated with trustworthy partners offering e-commerce solutions, payment gateways, gift and loyalty solutions, EDI, Open-to-Buy Consulting, and more.  These reliable and trustworthy partners connect to RICS so you can keep up with the trends of retail technology. Click here to see learn more about the current integrations with RICS software.


We’re excited and ready to help you integrate with RICS to meet your technology needs. Due to our current development initiatives, we won’t do the custom programming of the integration. Using your development team or a partner, RICS’ API can be accessed to create custom integrations. Our services team will work with your developers throughout enablement.


RICS is already integrated with tools and services to help your business perform at its best. However, there are always opportunities for new integration ideas! We’re open to exploring integration suggestions with your help. Implementation often doesn’t require custom development, but it does require a validation process to ensure the 3rd party adds value and is feasible using the RICS API. Our integration enablement process follows four steps:
  1. Client suggests an integration
  2. RICS enabled API access if the integration is purposeful and feasible
  3. RICS provides acceptable API usage guidance to client and integrated third-party
  4. RICS monitors to ensure API guidelines are met
Don’t hesitate to reach out to an Account Manager at any time to discuss initiatives like these. You can contact us at accounts@ricssoftware.com to start the conversation. [/vc_column_text][/vc_column][/vc_row]

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 When you own or manage a small business you have to be on your toes at all times. It’s go-time from the time you get in, to the time you leave (and sometimes at home after you thought you were done for the day). Orders coming in, sales coming up, employees with questions, and bills to be paid. Being “on” can be exhausting, and though it may be counter-intuitive, slowing down can really grow your business. Take a breath, take a step back, and look at your store(s) from a new perspective… Run a report you haven’t run in a while. RICS has some great reports to run when you’re in the analytical mood. What’s the old saying? “Retail is detail?” Well, you know where the detail is: Product, Price, Place, and Promotion. Let’s run a report on Product:
The Best Sellers Report includes the best or worst selling SKUs ranked by quantity sold, dollars sold, dollars profit, ROI%, Turns, On Hand Inventory Value, or sell-thru percentage. Run this report zeroing in on Worst Sellers and you may see a product that’s marked up too high, not featured enough in it’s section, or has aged out of style.
What about Price?
Pick a class to filter by in your Price List Report and take a closer look. Are there items that you can create signage to demonstrate value to potential customers? Your price versus the competition perhaps? Or, your price combined with a Frequent Buyer Program = Value!
If you have more than one store you can really get into the nitty gritty and make some strategic moves. You see on the Bestseller Report that Shoe A is flying off the shelves at Store 100, but at Store 200, they’re not moving the product. Is it worth Transfer some stock from one Place to another? Maybe you have a salesperson who is really good at promoting and selling that particular shoe. Find out with the Salesperson Summary and filter by that SKU. Find out how that employee is promoting the shoe and get others to do the same. RICS is a data powerhouse, and the reports available can really help you make good business decisions. So, slow down! Grab a glass of lemonade, sit back and explore RICS Reports. Want to learn more about how you can use RICS to grow your business? Click here to schedule a demo. The RICS team has been hard at work revamping our Help Center. With all of the new resources available, I’d like to take a moment to share a few of the areas I find to be most helpful: Physical Inventory – We know that taking a physical inventory can seem daunting, and we’re here to help! This resource contains step-by-step instructions to walk you through the process, all the way from counting items to committing your finalized inventory. Reporting Best Practices Guide – Want to assess salesperson performance? How about analyzing the effectiveness of promotions? This guide shows you how to get the results you want out of RICS reporting by telling you how to set up reports and what action to take based on the results. Create Purchase Orders – Purchasing is an essential part of your business. This resource provides you with everything you need to know when generating Purchase Orders. Check it out – even seasoned veterans might learn something new! Manage Non–Sellable Inventory – RICS’s Non-Sellable Inventory feature allows you to manage returned and defective merchandise effectively. This article gives you all you need to do so, from creating return codes to completing non-sellable batches. Cashier Training Guide – Training cashiers just got a little bit easier. This guide covers the basic functionality of the POS in order to get new hires up to speed and ringing sales on day one. Use the above articles as a starting point to acquaint yourself with the new Help Center, but don’t stop there! Feel free to look around and search for any topics you might be curious about. We’re actively working on adding new material, so keep checking back!