Your retail firm’s largest asset is the merchandise you sell. As a result, efficiently managing your inventory is essential to maximizing your profits. Here are four ways an inventory management system can help you do this:
Inventory management gives you visibility of your stock levels at each point in your supply chain. Having visibility will help you manage how much stock you currently have, when to reorder, and when items will ship. This method will help you pinpoint process issues such as overstocks and stock shortages. With visibility into each part of your inventory processes, you can take steps to improve overall efficiency.
Not having a system will limit your ability to identify if items have gone missing or have been stolen. Inventory tracking is a feature you can use to see product location and quantity in each of your stores. Tracking these numbers will help you determine if items have been stolen and identify products at high risk for theft. Once you identify high risk products, you can use loss prevention tactics for the future.
Using inventory tracking software is more accurate than relying on Excel spreadsheets. In the case of the latter, data is being entered manually. As a result, the numbers are highly prone to errors. On the other hand, inventory tracking software will keep track of this for you. This will make theft control more accurate when you compare your stock levels in the system to your cycle counts.
It’s no secret stock shortages can hurt your company’s brand and your customer relationships. Your customers expect that the items you sell will always be available to purchase. After all, it’s hard to build customer loyalty if your items are repeatedly out of stock. But, this can be easy to avoid with an inventory management system. Today, many of these have replenishment and fulfillment functions. These can help improve your company’s processes and reduce stock outs.
Automatic replenishment will create purchase orders once you reach your minimum stock levels. You can set each product’s parameters, such as inbound and outbound lead times. Simply reordering when stock is low may not be enough. Especially if the product has a long lead time. As a result, with a system you can ensure your stock always arrives on time.
Replenishment can improve efficiency bu reducing the amount of items you need to hold in stock. Do you know how much obsolete or dead stock you have? These are items that have completed their product life cycle and are no longer able to sell. If your retail store sells products that have short life cycles, such as clothing, this can be a huge issue.
Return Merchandise Authorization
Return Merchandise Authorization (RMA) allows customers to return damaged or defective products to the manufacturer. Especially with e-commerce on the rise, returns are common. But, it can be hard to keep track of returns. Using inventory software can make this much easier for your firm.
A system capable of RMA will make it easy to monitor returns, defects, and items that need repair. As a result, you can make sure that items do not become lost either in your store or upon return to the manufacturer. Item status updates will let you know when the manufacturer fixes an item or when you need to replace it.
In addition to tracking your returns, RMA can help you company figure out which items are commonly returned. This will help you maximize profitability on your store’s shelf space. If an item has a high return rate, it is important for you to be able to track the reason for return. For example, let’s say an item is frequently returned under a defect. Given this info, you can make changes to avoid this in the future.
Learn more about how Clear Spider can help you manage your retail inventory.