The following are 12 Greatest And Best Stocks Management Tips For Your Retail Business
- Purchases requisition management
- Stocks receipt documentations
- Stocks Records management
- Manual stocks management system
- Stocks management software
- Product pricing management
- Stocks control management
- Sales management
- Periodic stock management
- Use Last In First Out
- Display of stocks
- Reshuffle your stocks
As you open the doors of your retail store to the public, you are directly or indirectly inviting potential customers to come and stocks from your store.
In most businesses, like yours, stocks may take a substantial part of your business startup capital.
This, therefore, brings to the fore effective and efficient stocks management for your retail business.
Without stocks there will be no:
- business growth.
This article, therefore, seeks to look at the various roles you need to play to ensure effective and efficient stocks management in your retail business.
Purchases requisition management
Stocks management in your retail business begins with purchases requisition.
To Manage stocks effectively and efficiently in your retail store begins with sourcing for reliable suppliers and placing orders for stocks.
Beyond sourcing for suppliers, you should be able to anticipate what your customers need and place orders for them.
Additionally, when customers ask for something you do not have in store, you should write the item down in a notebook. All such items should be included in your next order for stocks.
This way, you will begin to take note of the demand pattern and preferences of your customers
Furthermore, you should bear in mind that ability to compete and keep your existing customers depends on your ability to offer your customers what they need.
Therefore, you should not place orders just for the fun of it. You should place orders based on the needs of your customers.
Stocks receipt documentations
Another important role you have to play is to ensure that you personally receive the shipments made to your store.
In particular, you should make sure that the:
- quality of the stocks complies with the specification in your local purchase order
- quantities are as stated in the local purchase order
- stocks have no defects
- prices are as agreed with the supplier
Furthermore, if you detect any differences between what you ordered and what was delivered to you, you should complain to the supplier immediately.
In other words, you should ensure that all the items in the waybill/invoice are correct before you sign the delivery note.
In such circumstances you should feel free to return the products to supplier and ask for replacement of the affected products.
Alternatively, If the supplier do not have the item in the store, you can ask for a credit note to be issued to you in respect of the products.
The amount in the credit note will subsequently be deducted from the bill from the supplier.
Stocks Records management
To Manage stocks effectively and efficiently in your retail business requires that you keep accurate records of your stocks.
Stocks Records keeping can be done in either of the following two ways: manual method or the use of computer software.
Manual stocks management system
One of the ways you can manage stocks in your retail business is by using manual systems to record your stocks.
With this method, each stock will have its own separate stock card.
The stock cards are usually placed beside each stock item on the counter.
In this system, each stock card has to be updated manually as supplies are received as well as when sales are made.
Some disadvantage of this method are that:
- it is laborious
- time consuming
- and prone to mistakes.
This method could be suitable if you are selling large items such as motor vehicles, cement and similar products.
Therefore, it is not recommended for use in a retail business where you sell many assorted little stock items.
Stocks management software
A much more modern method you can use in stocks management is stocks management software.
This method software method can be used to determine the minimum stocks levels, economic re-order levels and buffer stock levels and the balance of each item.
Using computer system has the following valuable advantages:
- ease of doing business
- saves time
- cost effectiveness
- higher efficiency
- ability to handle high volumes of transactions in record time
- ensures that you are not carrying excess stocks.
Another important benefit of using stocks management software is that it will enable you to keep your existing customers.
Furthermore, ease of doing business will help you to attract new customers.
Product pricing management
Product pricing management is an ongoing development, setting, executing and measuring prices for your customers.
Product pricing is an important marketing strategy to which you should pay special attention in stocks management in your retail business..
When fixing the prices of your stocks, you should remember that price is nothing but an estimate of what potential customers are willing and able to pay for your products.
Firstly, if you price your products too high, you will scare away your customers.
On the other hand, if you price your products too low you risk trading at a loss.
Therefore, you should strive to ensure that the prices of your products are neither too high nor too low.
Most importantly, you should constantly get feedback from consumers on how they are responding to the prices you have set as well as the ruling prices in the marketplace.
Stock management is the practice of ordering, storing, tracking and controlling stocks.
Stock management should apply to every item that your business uses to produce its products or services – from raw materials to finished goods. In other words, stock management covers every aspect of your inventory.
Stock management may also be called stock control, inventory management or inventory control.
Stocks are major assets that represents tied-up capital. Therefore, managing stock effectively will enable your business to free up capital.
Stock management simply means ensuring that you do not carry excess stocks that could tie down your capital.
Still another strategy that will help you manage stocks in your retail business is that you should be able to track the movement of your stocks.
This is because, in recent past, there have have been reported cases of unreliable employees:
- recycle stocks back to the supplier even at half their price
- employees convert to their personal use the proceeds from their fraudulent practices.
This sort of practices are common in most business where businesse processes are not computerized.
Periodic stock management
Periodic stock management should be one of your strategics to manage stocks in your retail business.
Periodic stock management involves conducting stock counts say two times in a year.
There are many benefits of implementing periodic stock management in your business. Some of them may enables you to:
- know from time to time the value of your stocks
- detect in good time stocks that are nearing expiry dates
- stocks that needs to be advertised or promoted.
To enable you do this effectively, depending on the nature and size of your business, it might be necessary to get external auditors to witness stock counts every six months.
The immediate benefit of using external auditors to do periodic stock counts is that it will put your employees on their toes to know that you are on top of your game.
Sales management simply refers to the process of:
- developing a marketing team,
- leading a marketing team,
- coordinating sales activities and
- implementing sales techniques
- predicting demand
- setting quotas, and
- evaluating performance.
Use of Last In First Out
Just in case your business involves the sales of perishable goods, you can use the principle of Last In First Out (LIFO).
Using this method, you need to sell off stock items that prone to damages. This ways you will be able to ensure that you do not suffer avoidable losses in your business.
Display of stocks
Stocks management in your retail business requires that you are able to display your merchandise in such attractive ways that should capture the attention of your customers.
Display of stocks includes how you showcase your stocks on the shelves, counters, window displays, ‘A’ Signage and so on.
You should remember that people are moved by what they see.
In other words, the way you display your merchandise will go a long way in making customers to make impulse purchases; i.e. buying things they never planned to buy!
Reshuffle Your Stocks
Another strategic way that can help you to manage stocks in your retail business is your ability to move stocks around as often as possible.
Although there may be some advantage in keeping some stock items in a particular location in the store, it is better to rotate or reshuffle your stocks frequently.
For example, you should:
- bring to the front old stocks that have remained dust ridden at the rear of the store for a long time.
- Customers may never know that you even have such stock items in your store
- be surprised at the rate customers will pick up those stocks that you probably have considered dead stocks
- move your stocks around from time to time.
- Can make customers purchase things that they never planned to buy.
In conclusion, to manage stocks in your retail business, it is needless to remind you that sales are very crucial to the success of your business.
Without sales there will be no cash. Without cash your wallet will be empty. And without sales your business will be worthless. Therefore, you should not leave anything and everything to chance.