Key Inventory Management Terms for Small Retailers
Running your own retail business can be a tremendous undertaking. You must contend with a variety of tasks, and not all of them will be familiar or a natural fit for your abilities. When it comes to inventory management, knowing a few of the terms you’re likely to encounter can help make the process a lot smoother.
Unit of Measure
While a unit of measure might sound self-explanatory, it is important to keep in mind that the unit of measure changes depending on the item you are selling. A small fashion boutique, for example, might use single items as a unit of measure, whereas a grocery store will typically opt to use varying units of measure according to the products in question. It’s important to give the matter some careful consideration when setting up your inventory management system and be consistent when applying it.
Product tracking will make or break your inventory management. It’s not just about keeping track of your items; it’s also about using that data to make smart business decisions. You’ll need to know who your customers are, which items sell quickly, and which products are seasonal to get ordering just right.
When you take a look at your current inventory and product tracking data to make decisions about purchasing, you need to figure out the ideal reorder point. You’ll want to take into account current and future demands for products, your current volume of stock, and how long the shipment will take to reach your store.
Fast stock is stock that requires a close watch because it tends to fly off your shelves. These are those hot-selling items that may require multiple alerts when using inventory management software so you can ensure you never run out of them.
Dead stock, on the other hand, are products that are essentially collecting dust on your shelves. You want to track this to avoid reordering it and being stuck with even more items that won’t sell. A healthy business will keep dead stock to a minimum so that shelf space can be devoted to products that are performing well.
This blog post was based off of an article from Business.com. View the original here.