Set an Inventory Schedule and Stick to It

Without scheduling specific days and times to count your inventory, it is all too easy to keep putting it off. There is no such thing as counting your inventory too frequently; counting it too infrequently is where the trouble starts. The best way to ensure that your store’s inventory is counted regularly is by setting a schedule. Once you have created a schedule, share it with all of your employees so that everyone is on the same page. By having as many hands on deck during inventory as possible, you will be able to get through it quickly and painlessly. Compared with putting pen to paper – which used to be the only option – modern inventory counting is quite a lot easier. Which leads me too my next point…

Use Cutting-Edge Tools to Make Inventory Counting Easier

There are many amazing new tools that simplify the process of counting a store’s inventory. The best part is that many of them are basically free. If you have an iPhone or iPod touch at your disposal, for instance, you can download a free app that allows you to sync your store’s inventory with the information that’s in your POS system. The app is called Retail Inventory, an app developed by my company Cashier Live. We use the camera to scan barcodes, which then looks the item up in your inventory and tells you how many should be in stock. You can verify or change the quantity, price, and cost, all of which is stored on the app and can then be synced with your POS system. This is a simple, streamlined way to ensure that everything is adding up like it should be. Learn more about our iPhone inventory app on Cashier Live’s website.

Make Effective Use of Reports

The data that is culled from your official inventories can be used to refresh and populate reports from your POS register. While you can run reports at any time, its important to do periodic inventory counts to make sure your data is accurate. Even the most careful employees in the world make mistakes from time to time, which is why it’s so crucial to count your inventory fairly regularly.

The reports that are generated can be used in a countless number of ways. You can analyze the data to determine which items are hot sellers – and which ones are collecting dust. You can get a feel for the typical turnaround rates for the items on your shelves, which will make it easier to stock up on them in an efficient way. Things change over time. What’s hot today might be a dud tomorrow. The only way to notice such changes quickly and strategically is by running reports as often as possible.

Receive New Inventory with Care

You should never blindly trust the packing list that comes along with an inventory shipment. Just because the sheet indicates that a certain number of items are there doesn’t mean that they actually are. The people who pack these orders are human; they often make mistakes. Or maybe your supplier ran out of a particular item and now it’s back-ordered. You’ll surely run into shorted items on occasion. In some cases, you might even receive extras. In either case, it is important to conduct a mini-inventory on every shipment that you receive. If you can’t get the numbers straight right off the bat, what hope is there of maintaining accurate information about what you have on hand?

The preceding advice merely touches on the tip of the iceberg when it comes to inventory management. It definitely pays to study up on the topic in order to keep things under control in your store. Items that sit on the shelves for too long are tying up precious space and money; those that can’t be kept on the shelves could prompt otherwise loyal customers to go elsewhere. With all of that in mind, make inventory management a top priority. Over time, it will pay off in the form of increased sales and a healthier bottom line.

Article contributed by Tom Greenhaw from Cashier Live. After working with a wide variety of independent retailers, Tom realized that their needs weren’t being met by traditional point-of-sale packages available. He conceived Cashier Live as the next step in retail software, and today thousands of retailers rely on it to manage their store’s. You can learn more about it at http://www.cashierlive.com or follow them @CashierLive.

The calendar known as 4-5-4 divides the year into months of 4 weeks, then 5 weeks, then 4 weeks and so forth. Beginning on Sundays and ending on Saturdays, it also ensures holidays are lined up and like days, such as a particular Wednesday, are lined up so that sales reporting can be done accurately.

As effective and beneficial as this calendar is, there is one problem that it brings to the table. It only covers 364 days. The extra one day that isn’t covered on the calendar is easily managed, though, by proper bookkeeping completed by each unique retailer. During Leap Year, though, retailers may opt to add another week to the calendar – though some retailers ignore this altogether. When a 53rd week is added, you simply push your weeks back by one to compare to the previous year. Essentially this would mean you would ignore the first week of the year. It also gives retailers and vendors a great reason to get excited – more time to meet annual sales goals!

In addition to allowing sales to be reported more accurately, there are two more valuable reasons to use the 4-5-4 calendar. The first is payroll. This calendar can help guide you in your payroll decisions and help manage your accounting. The second additional reason is inventory control. With a balanced calendar, taking inventory and tracking inventory can be done more accurately when completed routinely.  

While it’s common for large, corporate stores to use this calendar, not all independent retailers have introduced this to their stores. Most retail software systems have this calendar integrated into their systems, however some small business owners still track sales the old fashioned way (pen and paper or their own excel spreadsheet). Certainly there is not a right way to do this – only you can determine that for your store – but there are easier ways to manage your business. This calendar is definitely one of them. A great tool for retailers, if you aren’t following the 4-5-4 calendar already, you should consider how it may be helpful for you.

What Can Wholesalers Do?

The fact is, the price of many products at retail have gone down in their market value, therefore their wholesale price should reflect this. As wholesalers, if you aren’t already offering incentives, discounts or some sort of savings in your sales to retailers – you should be. Of course, this all depends on who you are. Many wholesalers are doing great or getting by because likewise, the retailers who are selling their product are comfortably moving their product. But if your product falls into the category of not making expected  sales, it’s time to help out your retailers.

What Should Retailers Do?

If you are a retailer who is struggling to make sales, consider how you can help your margins before you bring new product into your stores. Discuss options with your vendors that include discounts, incentives or possibly even product buy backs based on sales – or lack of them. Plan in advance how you will manage the markdowns customers are expecting, but also plan to make sure your customers don’t expect more markdowns to keep taking place. Buy less of more so that customers can’t wait around for what they want to still be there, but for less. And make sure your vendors know you are making these changes to support your business overhead and hopefully they will support you along the way, as well. After all, if they fall into the category of products needing to be marked down, then they should be smart enough to know it’s sell for less or don’t sell at all!

At the end of the day, as a retailer or wholesaler you want your products to sell. By supporting each other to make this happen, you can keep each other happy and ultimately – the final customer, too. But be realistic and be fair. These negotiations aren’t for everyone and retailers should respect that…. Likewise, wholesalers should respect their retailers if they don’t get reorders. Whoever said retail was easy certainly wasn’t working in it during a tough economy! Luckily, the battle is often worth the fight.

In no particular order, the below points are valuable reasons to consider attending trade shows.

1. Gain knowledge and exposure to new trends, products and resources that are available for your retail business or wholesale company. This is a great way to learn about what’s hot, what’s fading and what your company needs to have or do right now.

2. Stimulate new ideas and creative ways to support your business despite the economy, past seasons and more. Where you will gain this knowledge is endless – your competition at the show, your general experience at the show and even your participation at the show will make an impact.

3. Meet other retailers and vendors who you can lean on, learn from and possibly gain business from that you would not have had the chance to meet had you not attended that trade show.

4. Learn what your competition is up to without having to go to great lengths since their business information will be easily accessible. Ask yourself how do you compare to your competition and evaluate your strengths and weaknesses to best support your business.

5. Expose yourself to the press attending the trade shows so they know about your business – retail or wholesale. Make sure your business stands out so that they will remember you.

6. Generate leads for strategic alliances and most importantly, potential customers. Collect business cards, refer to the directory and use all other outlets provided to you during the show to create a list of contacts for your files – and your business outreach.

7. Participate in educational seminars, networking events and surveys that only take place at trade shows and will expose you to new people, new business and new ways of thinking for your business success.

8. Get answers right away, whether from a vendor or a retailer, since trade shows allow for immediate communication and easy, accessible outlets of exposure for both vendors and retailers.

9. Become educated on your industry so that you can better support your clients and customers by utilizing all the resources trade shows offer.

10. Have fun. Yes – have fun. Nothing gives a business owner more energy than a good time while working to keep them motivated to want to work more!

Planning a flat season is a good way of managing your inventory and most importantly, your dollars. Unless you have had significant growth over the last six to twelve months and firmly believe your growth will continue, planning for a flat season is the safest bet for your business. It’s likely that vendors will have excess inventory of their own that you can get in last minute should you see the need to, but let them carry excess inventory versus you in an effort to control your margins. The goal is to keep your inventory lean and avoid long periods of time between product arrival and product sell thru when possible. For example, fall fever may start in August with back to school in full gear and the traditional summer months coming to an end, but if you know your customers will still be wearing shorts in October, hold off on having too much Fall arrive too soon. Customers are buying later than they use to as a result of the economy, so pushing your delivery times back, as well, helps to keep your floors fresh and current according to the buying trends of your customers. As independent retailers versus big box players, you have more control over the ins and outs of your product arrival and selll thru and should lean on this information as you make your purchasing decisions and delivery date decisions, as well. Finally, keep some extra dollars available for product purchases made in the midst of the season. As much as we want to believe we will know what is the best seller before it even hits our floors, you may find a surprise or two that you want to bring into your assortment. Save cash as part of your sales plan so that you can chase these orders and move them quickly on your sales floor.

Planning for markdowns is inevitable for most retailers, but your goal should be to plan for as few markdowns as possible. If you take the controlled steps outlined above into consideration during your next buy season, it’s likely you will see a big difference in your markdowns once products arrive. Maintain a strong, realistic mind set when making your decisions and remember - let the vendors have excess inventory in their stock, not you!

When introducing a new product or collection, take the time to think about how you can let your customers know about this. It’s one thing if you have a new shipment of sweaters, but it’s another thing if you have a new shipment of sweaters from a line you have never carried before. Send out an email to your subscriber list with an incentive attached for your customers to want to come in and check the new products out. Possibly you offer a percentage off all purchases of the new product or throw in a gift with each purchase made. If this special something you are introducing is really a big deal, let your customers know this with a more grand celebration. Host a party, have a fashion show – make it fun and make it worth your customer’s time. Let the local press know what you are up to, as well, with a press release announcing your newest  additions and reminding the media of your great store at the same time. But don’t wait till the product arrives to get the buzz going. Tell your customers what they have to look forward to while they are checking out at the cash wrap. Include a flyer or postcard at check-out or through good old fashioned snail mail about these upcoming additions. Add signage to your store highlighting these exciting new additions and if possible, create even more of a buzz by creating a “wait list” if the product is worthy of one. Your excitement leading up to the arrival of the product plays a big part in the excitement your customers will have, too – so make it worth your time and theirs!

Finally, be realistic. If the buzz is only in your eyes and no one else seems to be responding to it, take it as a hint. Let the sales or lack of them be your final judge but don’t beat yourself up over introducing something new that may not work. It’s all part of the retail model and over time, you will know your customers well enough to know what they want and what you should buy for them. Even seasoned retailers with dedicated customers have misses in their purchasing decisions – not just you. But the best part of the retail business is that you get to do it again and again and again each buy season – so enjoy and remember to keep the buzz alive to help get the products moving!

If you are a shoe store selling handbags and jewelry to help enhance your shoe sales, maybe eliminating handbags is something to consider. This should, of course, be considered only after determining handbag sales are down. The goal should be to eliminate one or maybe a few categories that are not performing as well that in return will allow you to focus all your energy and financial availability towards the categories that are selling better. Dollars will open up and customer focus will be strengthened. In addition, the products that are moving will be highlighted more since there will be less product assortment for customers to consider. Take the opportunity to really analyze your current assortment of inventory and decide what is selling best and what isn’t selling at all. And ask yourself – are customers coming to your store for “this particular item / category” or do you have it in your store to help enhance other products? If customers aren’t coming to your store for it and it isn’t selling, maybe it’s time to reconsider why you have it in your product assortment at all.

Another thought is to eliminate a few brands without taking away total categories. This should be considered if you believe the category you are offering is vital to your overall store success.

Finally, be realistic with yourself. As boutique owners and small business buyers, we often tend to let our personal emotions get in the way of our professional decisions. Try and be netrual here to make the best decision right for your business.

So what can you do as an independent boutique to fight this trend? To start, you need to acknowledge it and accept it. So many boutique owners try and fight the reality of their customer’s habits, believing “they” will be the exception. However in our economy today, there are very few exceptions anymore. Even affluent shoppers with millions in the bank are changing their shopping strategies. The next step for you to do is react so that your customers remember why shopping with you is also to their advantage.

Support The Community & Small Businesses

There are some great local organizations within towns and cities across the country that support shopping local. If your community doesn’t have one, consider being the first to encourage this trend and talk with other small business owners to help you do this. The advantages of shopping local that need to be communicated with your customers include:

1. Protect Local Character & Prosperity – Every neighborhood tells a story. What’s yours? Remind your community of this story – history and present – and in doing so, remind your customers that among the only ways for your community to thrive is to support local businesses.

2. Linking Everyone Together - Local businesses do more than just sell products or services. They link people together, even customers themselves. Consider how your business can support your community by hosting community sponsored events, bringing neighbors together for a purpose, and more. If your business becomes a destination place for others, it will also become a destination to shop.

3. Increase Economic Situation – Did you know that dollars spent locally versus at national chains increase your communities wealth three times more than if spent elsewhere? By spending locally, you are investing in community jobs, local taxes, neighborhood improvement and community development.

4. Supporting Local Entrepreneurs – You don’t have to own a store to support a store. Remind customers that businesses built from entrepreneurs fuel the American economic crisis in a great way. They can do their part by shopping at them! As a business owner, you can support this, as well, by buying American made product and when possibly, locally made product. If you do this, make sure your customers know this, as well! Even if your whole store can’t support this trend, dedicate at least a section to it. Then promote it and sell it!

5. Product Diversity – Independent stores tend to have more unique products that chain stores or discount stores. Remind your customers of this. So what if they can get Tory Burch for 50% off regular price at Loehman’s? That’s NOT the point they should be caring about. Make them remember that shopping local gives them access to some unique, different, more limited edition product assortments while also supporting their community.

Talk To Your Shoppers & Lost Customers

It takes more than just understanding that your customers are shopping elsewhere to improve it. You need to communicate with your customers about why you care enough to tell them you need their support. A few ideas as to how to do this includes:

1. Arrange a Neighborhood Local Shopping Event - Get other stores together and promote a local shopping event. During your promotions, remind customers of all the reasons why shopping local is so important. Let them know that you know it can be tempting not to buy local but that you need their support for the entire community’s sake. Get your local radio stations, television stations, and papers to help create a buzz for this.

2. Promote Through Display – Speak to your customers by listing the advantages of shopping local in your store front window.  Get other local business owners to list the same advantages. Create your own pros and cons and “quietly” remind your customers of this by visibly placing them in a high traffic area both in your store and outside of your store.

3. Create a Buzz – Get your local press outlets to share in your support by creating news worthy stories to talk about shopping local and supporting local businesses! Newspapers, local magazines, community papers, local television stations and more are always on the look out for great stories to tell. This is certainly one of them! Talk to them to make this happen!

The reality is that independent stores are closing their doors across the country. We hear about big corporate buy outs and saving American corporate businesses all the time on the news, but what about us little guys and gals? Speak up rather than sit back to at least try and communicate this important message in your neighborhood. We are all in this together, but unfortunately many of us are closing our doors still.

What’s your story? We’d love to hear from you in the comment section below!

What Make a Hot Spot in Retail Real Estate

Is there a spot on your floor that everyone seems to notice first, no matter what is being merchandised? Traditionally, this spot usually includes store front window displays, aisle displays, and the merchandising space by the check out counter. In addition, wall space can often provide valuable retail real estate since it lifts the eyes of the consumer and draws attention if merchandised well. Locate the best real estate spots in your store and begin to take inventory of the product featured in these spots and their sell-thru. Then, as time progresses, start to utilize these spots to turn inventory over through the use of retail real estate. Are you looking to highlight new product? Use your real estate hot spots to do this. Need to get rid of some access inventory? Again, use your real estate hot spots to help you move your product. Make sure you acknowledge the change in your retail real estate as your product and season changes, therefore adjusting your floor plan, as well. When you move fixtures, your retail real estate may adjust, also.

What Makes a Weak Spot in Retail Real Estate

Have you ever noticed a spot in your store that no matter what you merchandise there, it just doesn’t seem to sell or even get noticed? This is a retail real estate weak spot. Nearly every store has them and yet many stores don’t know how to use them. The reality is that you probably need this space for your products, so good or bad, you have to use it. A few ideas to help make the best use of this real estate is to showcase product here that are double exposed somewhere else, which is a common practice for retailers to do (show your product in more than one spot to ensure visibility). Another idea is to put something here that customers know they want, such as stocked items including t-shirts or socks. In other words, offer something in this weak spot that customers come to your store for and will find no matter where it is placed. Finally, you could always use this space to feature your sale items. Everyone likes a sale nowadays, so put your weak real estate to good use by showcasing your great markdowns and must haves at discounted prices!

By understanding how your retail floor space works for you, you can then use this to your advantage when merchandising your store. Make sure you know your retail real estate to make sure that it is working for you!

To help control inventory, particularly in an economy when shoppers aren’t separating themselves from their wallets as easily as before, retailers should take a complete analysis of the current inventory assortment based on the points below. Consider how these points will help you with your current inventory sell through so that when you make future buy decisions, you will find your inventory balanced more evenly and your register filling up more quickly.

Product Sell-through vs. Square Footage of Product Allocation

How much space does the product you sell take up in your store? Is the product in your store that is not selling taking up more space? The goal is to maximize your store with products that are moving. You should markdown the product that is not selling to help increase the chances of it selling sooner, eventually opening up your store space for more products that have proven successful. It also allows your open to buy dollars to become more available, allowing you to potentially introduce new product. Make sure that you do not let slow moving product sit on your floor too long without marking it down, then make sure to continue to mark it down until it sells. It is wasted space if it is just sitting there. The first 30 days of any new product on your floor should allow you to understand if customers want this or if you will need to mark it down eventually. The goal is to have the products that sell faster, or even at all, take up the majority of your floor space. We all make poor buy decisions, so deal with these mistakes if necessary to get to where you want to be next time in your buying decisions.

Product Hot Spots and Weak Spots

By now, as a retailer, I am sure you have discovered the power of merchandising. Whether you have or have not paid much attention to this, make sure that you take the time to determine the retail real estate in your store that helps move products while on the contrary, determine your store space that doesn’t seem to help increase product sell through. By understanding this, you can maximize your sales. There is always going to be “dead space” on your floor and like it or not, you may need to use this space to merchandise some of your product. Make sure you merchandise and re-merchandise your product routinely so that you offer customers a refreshed shopping experience, but also the opportunity to move products from the hot spots to the weak spots and vice a versa as needed.

A merchandising note – If you have product that customers come to your store for, this is the product to put in a weak spot versus a hot spot since they already know they want it. Use your hot spots for products that you need to sell, not only the ones you know will sell. Mix it up!

Excess Inventory Control

Unless you are one of the few retail buyers who is always on target with what their customers want and you know will absolutely sell, it’s possible you have extra inventory sitting around. The goal for you is to move it. And move it now! Don’t wait for the possibility that it may come back in style or that the economy will get better. Mark it down and get it sold. Hold a special sale. Or sales. Offer discounts for special customers. Whatever your plan is, the plan should be to not let this product take up space on your retail floor or in your back room – even if you hate the thought of selling it for less than you planned to.

Controlling Your Buys

It’s so tempting to bring in a ton of great new things to your store and just start over, so to speak, when you have a lot of things that you know are not working for you. BUT – hold back. Find control and find balance to bring these new items in without cornering yourself in a position where your current inventory will financially put you in a hole. Unless you have the resources to be flexible and to buy without concern, then make sure you strategically plan to get your currently inventory out of your store before bringing in a ton of new things. I don’t believe that you can hold off on buying anything new, however. Customers want to be surprised and tempted and enticed to buy, so you need to give them that with what is in style, with what they want, and with what you know they need. That said, find balance and control with what you already have and what you want so that you can better manage your inventory needs.

Still looking  for more help? You may check AdvanceWare for its scalable and flexible inventory software (http://www.advanceware.net/) that is suited for Quickbooks users, wholesalers, distributors, online retailers, importers/exporters, 3rd party logistics warehouses, and any other inventory-based businesses to help you in your inventory needs. In addition, you can find some video demo at http://www.advanceware.net/videodemos.asp