Category: Inventory Management

But, we must take exception...

4/24/2023

We're sure you'll agree. Misinformation can be very harmful. Retailers surely don't need more harmful anythings!

Just last week, we came across the proverbial straw that broke the camel's back. It was a post on the Intuit Quickbooks site*, titled "Inventory Turnover Ratio." And the explanatory article was accompanied by an "Inventory Turnover Calculator."

What do we take exception to? The misleading and/or incorrect information it provides.

For example, their "Inventory turnover calculator" requires two entries.

First, "enter the total costs involved in selling your products."

We must take exception. "Total costs involved in selling your products" is NOT the same as Cost of Goods Sold. Nor do they specify that it should be for a 12-month period of time.

The second entry they request: "Average inventory cost."

We must take exception. What they surely meant to say is inventory @cost.

Plus, they simply refer to "12 months of ending inventory balances," without specifying that it should be for the same 12 months for the previous entry.

Answers to Those Top Two Buying Questions

1/30/2023

There is much enthusiasm coming out of the buying trade shows, and why not?

Attendance levels have been near to or better than 2019. Energy levels are high, and very contagious. A sense of urgency persists, due to past supply chain issues, emboldening the pressures from the vendors to "Buy now!"

Especially in today's environment, FOMO - the Fear Of Missing Out – can be a compelling sales pitch.

How to deal with this pressure, especially given all the headlines about a coming recession, or drops in consumer spending, or cautions about the need to control expenses, improve profits, maintain cash?

Here are two tactics to help you manage this. One helps monitor and control "How much to buy?" The other helps decide "What to buy?"

Index of Retail Sales Potential

1/17/2023

Managing inventory – arguably the #1 responsibility of a retailer – has been beset by a host of new and sometimes daunting challenges since 2020.

The last few months of 2022 only made matters worse. As supply chain issues seemed to subside, foreboding talk of a recession dominated, dampening customer spending.

Many retailers are feeling a bit over-inventoried as a result. Similar to that sense of having a few added pounds after the holidays.

In other words, a situation that is crying out for perspective. And The Retail Owners Institute® has you covered on that!

Increase the "Productivity" of Your Customers

11/28/2022

For most retailers, especially this year, reducing inventory is priority #1. With talk of a 2023 recession still in the air, lingering inflation driving up costs, and rising interest rates, cash is definitely king this year.

Time to revisit your year-end strategies for meeting your targeted ending inventory on December 31. If you are like many retailers this year, with plenty of merchandise in your stores, you know the challenge: how best to turn that inventory into cash? Quickly! Especially without looking like a distressed merchant.

One answer? Focus on improving the productivity of each shopper who comes to your store. That is, increase the IPTs (Items Per Transaction.) That is, make it easier, more compelling and more fun for them to buy more items from you.

This Year, It's More Than the Turkeys

11/21/2022

Each year at this time, our thoughts turn to turkeys.

No, not the ones that will adorn many dining tables on Thursday. But the "turkeys" lurking amidst your inventory. You know; non-selling, distressed, slow-moving, old, unappealing leftovers among your merchandise.

But this year, frankly, our worries extend beyond the turkeys.

Here are some of the reasons why.

All the gloom and doom talk about the economy and recession continues, affecting consumer attitudes.
With few pandemic or supply chain issues, many retailers have more-than-ample inventory this year, unlike the previous two years.
Inflation is impossible to ignore, especially for those who drive cars or shop for groceries.

As a result, in this environment, consumers are scaling back their discretionary purchases, and/or choosing to spend on travel, dining out, or other experiences versus retail merchandise.

Not an upbeat prospect for retailers, is it?

Let the "Farewell Tours" Begin!

10/31/2022

Except for the lingering sugar high, Halloween is soon to be behind us. Retailers know what that means: on to the Holiday Season!

Of course, for most retailers that brings a major focus on sales.

But, savvy retailers are focused particularly on the targeted ending inventory on December 31. Those retailers are carefully watching sales reports, and are poised for action.

Each week, they identify "What's not selling yet?" And they do something about it! Move it around on the floor? Display it differently? Pair it with merchandise that IS selling? Lots of choices.

A Great Time for Real Merchants

10/17/2022

You've seen all the headlines. Worldwide inflation. Dire warnings of a coming recession. Big time discounts at retailers due to boatloads of inventory. Amazon doubling down on their Prime Day(s) sales. Shoppers shopping early in anticipation of rising prices.

Shaping up to be yet another "unprecedented" Holiday season for retailers, isn't it?

And a wonderful opportunity for all merchants!

How best to start? Set the boundaries.

First, specify how much inventory, in total, you want as of December 31.
How much by department?
Category?

Next, establish clear routines for monitoring inventory levels.

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