6 Essential Tips for Smarter Stock Management

Managing your retail stock doesn't have to be rocket science. With over two decades of experience working with retailers of all sizes, I can tell you this: the less stock you carry without sacrificing sales, the better it is for your business.

1. Know Your Stock Inside Out

No, you don't need to memorize every unit in your inventory. But you should have a system that allows you to easily check what you have, where it's stored, and when it expires. Keep it simple; the system just needs to track stock in, stock out, any write-offs, and the location, if you have multiple. And don't forget expiration dates if they're relevant to your business or the product

5. Deal with Slow-Moving Stock

3. Learn From Your Mistakes and Successes

4. When Talking About Option Count Less Is More

6. FIFO and FEFO: Your Stock Room's Best Friends

2. Forecast Your Needs

Analyze past sales and make the most accurate future sales forecasts you can. Once you know what you're going to sell, plan your stock requirements (as we discussed in this post). In essence, you need enough stock to support your sales until your next supplier delivery. So, if you're selling 12 units of a product per week and you have 10 left, your order for the next weeks should be 38. If you have to order multiples of 10, consider moving to 40 for a bit of buffer.

As we mentioned in a previous post, aim for a concise, focused, and commercial product range. A tight range with fewer SKUs where every product serves a purpose often leads to better results.

Don't panic if a product isn't flying off the shelves in the first month. Try the following:

1. Move product around

2. Ask for feedback from your team, and consult with your clients, get their opinion

3. Bundle products together, a little reduction on the combined retail price can really push sales. The little drop on % margin should be offset by the increase sales resulting on an increase cash margin. One piece of advice, make sure that products are complimentary

If these strategies don't work and stock accumulates, consider price adjustments.

4. Promotional ( Point of Sale ) Discounts: When you believe a product is still relevant, but you got a bit too much, offer a temporary discount, like during Black Friday sales. This can help clear excess stock.

5. Permanent Markdown: If a product has reached the end of its lifecycle, it's time for a permanent markdown to make way for new items. Plan this carefully to minimize losses. Work with your suppliers so you are told in advance plans to discontinue product, and get them to support your discounting with a contribution to markdown,

Set up your stock room using FIFO (First In, First Out) or FEFO (First Expiring, First Out) for products with short shelf lives. Organize your stock to accommodate new deliveries effectively.

Managing retail stock might sound complex, but it's all about following some straightforward rules and processes. If you feel like you don't have the time or expertise to do it, don't worry; I'm here to help. With a little effort, you can optimize your stock management and boost your business.

In summary

Review your past forecasting performance and your product selection. Figure out what went right and what went wrong. Use those lessons when planning your stock for the future.