So what’s the optimal method for building your inventory? Knowing exactly what data you need to look at can help you make more informed business decisions — we explain how and why below.
Deciding what items to purchase for your inventory
Tip one: Use sales from months or years past to estimate what you need to buy today. Evaluate what’s selling well in your store and what’s not; determine which items you need to order more inventory for and which you qatar cell phone number need to sell off. Seasonality should always play a key role in your projections — stocking up for the holidays at the right time (i.e., in the summer) will ensure you’re ready when the time comes. Looking at sales from years past can help you gauge when to buy more and when to hold off. Learn from your successes and your failures.
"Up to 16% of SKUs [stock keeping units] reported lost or stolen were actually misplaced, leading to 25% in lost profits (a Harvard Business Review study found )."
How to properly promote your inventory products
A good marketing strategy can mean the difference between an item that sells and one that sits on your shelves gathering dust. One of the keys to minimizing the occurrence of “idle inventory” is to analyze the relationships between your customers and your products—in simple terms, which types of customers are buying which products? This information will come in handy when it comes time to promote your products. If your target demographic for engagement rings during the “peak” wedding season is men, and you notice that there’s no spike in sales of said rings, take a hard look at how you’re marketing to them and fix it.
Analyze your inventory data
Always analyze the specific requests and orders you receive from your customers. If they often request items that you don’t have in stock, this can be a major sign that you are not purchasing the right type of inventory, as it is not meeting your customers’ needs and wants. Paying attention and identifying which items are selling like hotcakes and which items are taking longer to find buyers will also help you adjust your replenishment habits. Finding the right balance between running out of stock on popular products and overstocking on slow-selling products is crucial to continuing to make a profit.
Stock shortage
Do you analyze your inventory shrinkage regularly? Knowing which products you’re losing more than the norm can help you identify items that need to be locked away (a preventative measure to protect them). According to a Harvard study, it was common for merchandise to be misplaced and therefore “lost” by employees (also known as “phantom stock-outs”). Up to 16% of SKUs [stock keeping units] reported lost or stolen were actually misplaced, leading to 25% of lost profits . Ensuring that your inventory is properly categorized by studying your data will allow you to catch any inconsistencies immediately, which can help you avoid more serious problems in the future.
Get rid of defective items that cost a lot to repair
Are there products that are costing you more in repairs than you expected? If they are causing you to go over budget on your inventory while regularly frustrating your customers, replacing them with more reliable alternatives is an option to consider. Searching online for similar items will lead you to higher quality equivalents, and perhaps completely different ones, which will help improve your business. Holding on to unprofitable items will hurt your business and your relationships with your customers.