2 steps you need to implement to better run your retail business efficiently
A lot of retailers do not pay enough attention to a critical aspect of their business – Inventory. They care so much about selling that they neglect the products they actually sell. It makes no sense. This portends serious problems for such retailers in that their bottom line is never accurate because they do not have adequate inventory management. So what are the problems of inadequate inventory management?
- Running out of stock – it’s a no brainer. How do you know your stock level if you don’t have a proper inventory management process in place? You are constantly running out of stock. You don’t even know your best sellers when you don’t have accurate stock data.
- Theft – You obviously don’t know what you have in stock so if there was any theft or pilferage you definitely won’t have any clue about it. It’s like fishing in the dark so to say.
- Loss of customers – the above two will ultimately lead to loss of your loyal customers. Of course they can’t continue to patronise you when they know you are always out of stock. They will move on to your competitors without batting an eyelid.
- Loss of revenue – it is logical to deduce that all of the above will lead to loss of revenue for any business. Yes, you can’t sell what you don’t have. This is super critical for the survival of your business.
So how then do you combat the above problems? There are two (2) critical steps you have to take and they are clearly interwoven;
- Invest in a robust Inventory Management tool and
- Have a Stock-take process in place
Invest in an inventory management tool
This is actually one of the first things you have to put in place when setting up your retail business. You need a robust point-of-sale and a very good inventory management system. Why do you need these?
- Point-of-sale: you need an efficient sales process. Having a good POS helps make your selling easy and less cumbersome. This ensures you have almost one hundred percent control of your sales.
- Inventory Management System: this goes hand in hand with the POS mentioned above. You sell what you have in stock. You know what you have in stock only when you have an inventory management tool. This is the bedrock of stock control mechanism for retail businesses.
The ideal scenario is to have a combined POS and Inventory Management System in place but the best scenario is to have a combined system that also provides Analytics. Analytics provides not just your business data but the right information you will need to make the right business decisions.
We have developed PrognoStore for small business owners just like you. PrognoStore was designed to take the pain out of running your business. You can read more on what makes Prognostore the best point of sale system in Nigeria. You can also read the post by our CEO Introducing Prognostore to Nigerian retail businesses.
Have a Stock-take process
You will have to count your stock to know what you. As simple as. The good news is; you can make it a whole lot easier. So how easier? Efficiently and effectively. A good inventory management system should ensure the followings:
- Automated stock-take: automation reduces mistakes and stress during manual stock-take. Manual stock-take is when you are constantly sifting through papers and excel (spreadsheet) to know what you have sold and what you currently hold in stock.
- No disruption to normal operations: Some retailers stop their normal operations for a few days to enable them carry out a stock-take. Why is this so? This is essentially because they don’t regularly carry out a stock-take or they have probably never done one or it may even be due to having a manual stock-take process.
A good system like PrognoStore allows for real time data. This means you can perform a continuous stock-take even during normal business hours.
Now you see that having a good inventory management system in place is essential for the smooth stress-free running of your business. Do you agree with these? Or do you have other points to add to the discuss? You can add your comment in the comment section below.
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