To control your retail inventory, keep an eye on the most popular inventory items and your slow moving items.
· Make sure that as you reorder, you’re reordering your fast moving items not your slow moving items.
· To determine what your hot items are, just look at your last couple of weeks sales. Usually, your last weeks sales are a good indication of what your future sales will be.
· Have your computer run items which have been on the shelf and have not sold for a long time. Consider donating these items or doing a fire sale to get rid of items that are not selling.
· Put yourself on a purchase budget. Assuming that your mark up is 100%, when you make your two week order, take your retail sales from the last two weeks, divide that number by two and that number is the amount that you can reorder. Stay within that reorder point. For example, if in the last two weeks you’ve sold $6,000 worth of retail products, then you would be on a budget to purchase only $3,000 worth of items this year ($6,000 x .5%).
Using these tactics will only keep your inventory at its current level. You are going to have to be careful that you replace those items that you are selling quickly. If you want to reduce your inventory, you need to make sure that you have your shelves full on those items that you need to keep, but at the same time you need to reduce your items to get your inventory down to a reasonable level.
· Make sure that as you reorder, you’re reordering your fast moving items not your slow moving items.
· To determine what your hot items are, just look at your last couple of weeks sales. Usually, your last weeks sales are a good indication of what your future sales will be.
· Have your computer run items which have been on the shelf and have not sold for a long time. Consider donating these items or doing a fire sale to get rid of items that are not selling.
· Put yourself on a purchase budget. Assuming that your mark up is 100%, when you make your two week order, take your retail sales from the last two weeks, divide that number by two and that number is the amount that you can reorder. Stay within that reorder point. For example, if in the last two weeks you’ve sold $6,000 worth of retail products, then you would be on a budget to purchase only $3,000 worth of items this year ($6,000 x .5%).
Using these tactics will only keep your inventory at its current level. You are going to have to be careful that you replace those items that you are selling quickly. If you want to reduce your inventory, you need to make sure that you have your shelves full on those items that you need to keep, but at the same time you need to reduce your items to get your inventory down to a reasonable level.
I hope this is helpful.
Larry Kopsa CPA
Larry Kopsa CPA
