What Is Retail Inventory Management? Here’s How It Can Help Your Small Business

2018-10-31T12:37:33+00:00April 26th, 2016|Categories: General, Retail POS|Tags: , , , , |

Retail inventory management is a powerful tool that can dramatically grow your business by minimizing administration time, costs, and waste. However, the system you choose must suit your particular retail needs. The complexity of a system changes, depending on your goals, your business operation, and how your industry or niche changes over time. However, it is important to choose and implement an inventory management system while your business is still young. Trying to overhaul an extensive existing system is much more difficult. Retail POS software with inventory management should be part of your initial retail business plan and expenses. It is an investment that will directly affect the future success of your retail business. So what is retail inventory management anyway? And how can it improve your store? Let me start with a personal experience first.

When I was nine, my parents bought a retail store in our small town in Germany. In those days, it was called a “variety store.” It offered magazines, cheap novels, candies, some stationery and a selection of souvenirs for whistle-stop visitors from the nearby train station. The store was packed with thousands of different small items. As soon as my parents purchased the store, and for many years following, my brothers and I were “voluntold” to assist with the inventory. To this day, I shudder at the thought of counting every single item in that tiny, cluttered store. Using a pen and paper, we produced a storewide inventory every week. Personal computers had not quite become accessible for the average person so even Excel was out of the realm of options. What I would have given for real inventory management!

What Is Retail Inventory Management Now?

Retail inventory management has transformed into much more than a necessary accounting task at tax time. The right system for your business will be integrated into the daily operations of your business. You will find your data to be much more accurate, with a customized list that updates in real-time to reflect sales throughout the year. The right POS for your business will provide an additional level of checks and balances for increased accuracy. And at KORONA, our retail inventory management professionals can help you decide what system works best for you.

A well-established inventory management system will assist your business in growing with you as you hone your focus and adapt to changes in the market. In a relatively short time, my mother transformed the family “variety store” into a “gift store.” She changed her target market to include a more discerning clientele, which still included tourists, but branched out to local residents who appreciated one-of-a-kind items that my mother would carefully source at major “gift shows” every season. It always amazed me that my mother seemed to be able to account for every item on her shelves. She painstakingly chose pieces, and knew when they sold, went missing, or were out of place. She also knew how to tailor product for her clientele, and when she needed to replace or refresh inventory. But not everyone, including myself, has this kind of retail intuition. And even for someone as gifted as my mom, problems arose.

What Can Happen Without Great Inventory Management?

Two problems resulted from my mother’s style of inventory management. First, it is difficult to staff a business that relies on one person’s vision. Even in a small business, it is important to be able to delegate tasks effectively. In a sole proprietorship like our family business, the entrepreneur dreams of being in control of time, both personally and professionally. If there is no policy or system in place for inventory management, it is difficult to hand tasks over to a qualified employee who you can trust to represent you well. While part of this issue involves one’s personal management style, a failure to delegate tasks can be a real problem if there is a change in circumstance, illness, a holiday, or any circumstance where the owner/manager has to be away. In larger businesses, delegation is essential for a successful operation. Inventory management allows any employee with access to assess the state of your inventory, update it, and take any required action. Additionally, it provides remote access to reports so long as you have an internet connection. This saves invaluable time and money and provides a peace of mind when away from your retail store.

The second problem of my mother’s style involved time management. Her strength was her customer service. She had a knack for understanding people and anticipating what they would need or want. However, the job of running the store divided her attention to innumerable tasks, in the end, diverting her from her passion. The shop was successful, but it required a considerable investment and sacrifice from my mother, even just to keep track of the products. She particularly struggled with the day to day record keeping of the business. Administrative tasks are often not an entrepreneur’s passion. The demands on a business owner’s time increase as the business becomes more successful. In those days, time management solutions were limited, and my family was forced to balance their creative talents with the administrative tasks involved in keeping a business on track.

What Inventory Tools Do We Have Now?

Contemporary inventory management systems reduce the amount of time it takes to monitor retail activity. The right POS system records every item and tracks its progress from source to customer. With easily accessible reports, it provides an overview of sales. It can also give a detailed account of which items sell well, and which are not moving, even making suggestions for action with certain products. Your POS solution frees up admin time, with notifications about when to restock your best sellers, or perhaps clear out an item that is not moving. It tracks the variation of sales by many different metrics, making your business and profits more predictable. The right POS will take the guesswork (or hours of painstaking analysis) out of your business operation.

The most critical role of a great POS system for inventory management is to establish a long-term policy that can be managed by more than one person. When a system is in place from the beginning, it sets a template for growth.

See Related: The 10 Most Important Retail KPIs

Get the Best Retail POS Inventory Software

At the launch of a business, it may not seem necessary to have your POS software in place. You may be able to manage inventory in a small business on your own or recruit friends and family for help. You will, however, find it difficult to sustain your operations. With a system in place from the beginning, you will much more easily adapt for success. In fact, early preparation for growth can actually ensure that you are successful, and can open up possibilities for your business much sooner than you might have anticipated. You will not find yourself involved in costly and time-consuming backtracking to reorganize other solutions you created out of necessity. With the right professionals available to help you at every step, you will launch with a system that is simple and flexible. And you can adapt in the evolving, volatile, and highly competitive environment of retail.

Retail POS platforms are simple, efficient tools for cutting-edge, long-term solutions. Contact us today to tell us about your business. We will work with you to help you focus on your vision and find the right solution for your business. Whether you are recruiting friends and family to help you sell at the weekly farmer’s market, starting an eCommerce business, or launching a brick and mortar retail space with several employees, you won’t regret having the foresight of investing in an effective inventory management system.

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