Saturday, July 11, 2009

Tracking Inventory Through POS

Do you have a mountain of inventory in your retail shop? The money tied up in that inventory isn't in bank feeding cash flow. Do you know the carrying cost of inventory as a percentage of your costs? Steve Bailey asked that question of Wilson's Garden Center's Ned Wilson, Rice's Nursery & Landscaping's Steve Maddox and Altum's Garden Center's Karen Thacker. Here are some tips from them on how they use POS for better inventory management.

  • Hire a data entry person to enter purchase orders. “Too many fingers in that pie cause problems,” Wilson says.
  • Rice's has added the margin on each product to its purchase order. “We need to know before it's received what the margin is going to be,” Maddox says. “As keepers of inventory, we need to find the average cost.” Maddox says Rice's used to just look at margins in the winter, but now can look on the fly during the season.
  • Thacker says if you can get inventory reports on a weekly basis, only make purchases of two to three weeks of inventory. "It gives enough overage if you sell more than in weeks past. If you're trending more on a certain fertilizer, you need to use gut and order for that. Don't just go by the numbers.”
  • Dead and slow-moving inventory reports are important, although it can be scary to see exactly how much inventory isn't moving.
    “We usually buy based on emotions and then rationalize what we buy,” Wilson says. When you see what you're not selling, you eventually have to swallow your pride and get rid of it.”
  • Altum's tracks its top 100 customers based on sales. POS helps the store track who hasn't shopped lately, so a staffer can call and welcome the customer back to the store.
  • Rice's has 7,000 to 8,000 active loyalty program customers. Maddox says the number of customers buying more is increasing and the number of customers buying less is decreasing.

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