Welcome readers to the first article of Supply’s Retailers Guide series. In this series of articles, we will try to lay out some knowledge that may be helpful to newly starting retailers. In today’s article we will talk about how best to maintain your inventory.
Your customers should always have the impression that your shop has everything. How do we do that? By precise inventory management. One important thing to remember is that it is not necessary to have every product or every variety at your shop, but you must have what your customers want. Below are some key principles for keeping a good inventory in a small grocery retail shop.
Identify the fast moving items and ensure you never run out of them, these items can be the usual suspects like tuna cans, noodles, milk packets, etc., however it also varies widely from store to store; some stores could find that cosmetics move very fast whilst others may find fresh produce to be the best seller.
Never keep too much stock on hand of slow-moving items. In the retail business if stock is sitting on your shelves or storeroom long enough to gather dust, you are burning money. This is money you could have invested in other items and already have made a profit on. When introducing new products also be cautious not to take on too much stock. Sometimes, when suppliers offer bulk discounts it can be tempting to take a bigger stock, but we must always consider how long it will take to move that stock. Also, make sure to consider expiry dates and shelf lives!
Listen to the customers wants and needs. Most small retail shops have a small community which make up their regular shoppers. Ideally the owner/manager should spend a lot of time at the shop and have rapport with these customers. This dialogue can be helpful in knowing when your customers want a certain new product, or if they do not like a product you are selling now.
Consider the margins when you are deciding on stocking a product. If an item has a high profit margin it may be worth it to stock some even if it takes a while to sell. It is a delicate balance but often lucrative, especially with products such as certain cosmetics or toys.
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