Written by Kris Davis, One Step Retail Implementation Specialist | January 2, 2019 | Photo by MODERN ESSENTIALS on Unsplash
As a retailer, the cost of your goods is most often the highest expense your business has. To maximize your profit, you want to minimize this expense while selling your goods for the highest amount possible. Many of today’s retail software has the functionality to help you get the most out of your inventory. Below are a few ways to achieve more profitability from your goods.
Maximize your Inventory’s “FaceTime” with a customer
Most retailers have an E-Commerce site in addition to their Brick and Mortar stores. A website is often treated in the same manner as a store and a large number of goods is held in a warehouse. This is often not the best way to maximize the goods’ selling potential. If you can have those goods in a store, in front of a customer, you double the chance of selling them. When a web order is received, many retail systems can be configured to send that order to the store for fulfillment.
Selling from other locations
Maybe, not all your stores are big enough to carry your full product line. Maybe, a style comes in many colors and sizes.
Try filling each store with a slightly different variation of product and have examples of each style, in all stores. This allows a customer to try on the small, red shirt for fit and see the large, green shirt for color. They then feel confident that they want the small, green shirt and can have it shipped to them from another location. Many retail systems call this a Send Sale and it is a powerful tool to maximizing the potential of your inventory.
Putting the goods where they have historically sold
Most Retail systems allow you to run a size selling or color selling report for an entire department of goods. You should be utilizing these reports to help in your buying and allocation decisions. In running these reports over time, you will start to see different trends across your stores. You may notice that smaller sizes sell better in store 1 and larger sizes sell better in store 2. Use this data to allocate more smalls to store 1 and larges to store 2.
Putting the goods where they are selling
Running sell-thru reports after the first week of sales for each item is very valuable. It will allow you to see how each style, color, and size is selling at each location. You may even be able to react and purchase more or know how to replenish from a holdback amount in a warehouse, or at least move the goods from the slow-selling stores to fast selling ones.
Often retailers wait too long to run sell thru reports and are stuck marking down all the slow movers in the slow-selling stores. This drastically affects your profitability.
The above ways to achieve more profitability from your goods are just a few examples. There are many more ways through process change, reporting and just simply being proactive that you can maximize the potential of your inventory. Should you need more inventory information, contact your Account Manager about One Step’s Inventory Planning program designed to help you buy the right amount of inventory, at the right time, maximizing your profits.