POS AND INVENTORY MANAGEMENT SOFTWARE
Inventory tips to help expand sales and reach new customers
It’s a problem every business owner has experienced at one time or another; you were so sure that that green sweater was going to be a hit that you ordered an extra large supply just in time for the fall sale. Now it’s the new year and the sweater has flopped—your stockroom is full of the unsolved stock, taking up valuable space that should be used for new items.
This leaves you with a few lousy options:
Get rid of the items and lose out on your initial investment
Hang on to them and lose valuable space in your stockroom, hurting future sales
Neither of these scenarios is ideal, and both hurt your bottom line. More to the point, though, your decision to go all-in on that sweater reflects a gap in your knowledge about your customers. Clearly there was something in that item that didn’t resonate with them; unless you can pinpoint what that is, you run the risk of doing it again and compounding the problem with multiple, unwanted items.
Simply put, you need tools not just to manage your inventory, but also to better understand your customers. This page details how you can utilize your POS (point of sale) and inventory management software features to help you do this.
Draw them in with your latest merchandise
An ongoing test for inventory management is the delivery of a new item into your stockroom. The future of this item is determined really in just a couple of weeks as initial sales are recorded. If the item does well, it will rise to the top of your inventory scale as one of your most important assets. If it does poorly, your main focus will be getting rid of it to be replaced it with more effective stock.
So how do you know which is which? Data analytics available through your POS can help you chart the profits and losses of particular items over a given period of time. Statistics presented should be clearly represented with definitive numbers for each time frame. For example:
Having this information available plots a more direct course for a company in terms of what to do with new inventory. As we can see from above, the new item has not done exceptionally well following its debut. In this case, it may be a good idea to consider testing this item out for a few more shipments before making a final decision, but it is likely that this item is on its way to replacement.
Whatever the case with your particular item, having the ability to effectively determine the value and worth of adding new items to your business as they come in is an invaluable asset. Having this information available keeps your profits high, losses low and your stockroom relatively open for new items coming in.
Moving older inventory with POS and inventory software
Sometimes stock just doesn’t move that well. In these cases, those out-of-date items pose a significant problem to your business model. It doesn’t make sense to waste them; that would be an even bigger loss to the investment you made in the item in the first place, on the other hand, keeping them in your storeroom takes up space that could be used for more valuable inventory.
So how do you get rid of inventory or stock that seems to be stuck in place? Once you’ve identified your older inventory from the rest, the challenge is devising promotions and specials that will encourage customers to buy an item despite it being off-season or otherwise undesirable. There are methods to do this, including:
Probably the easiest promotion to set up and manage, businesses can simply offer customers a certain percentage off of the list price to move it off the shelves quickly. The advantage that this formula offers is the scalability; starting at 10% and ratcheting up over time squeezes the most profit out of an item before you are practically giving it away.
Although people may not want that sweater you have in stock, they might want a pair of jeans that it would compliment. By offering your least popular item as an add-on to a more popular piece, you increase the chances that it will move off the shelves.
Customers love feeling like they are doing good in the world with their purchases. Motivating them with the promise of a donation to charity can be a good method to drive interest in a product that is not performing well. The downside is that this is likely the least profitable method, but it will be a good way to clear shelves.
Getting rid of your old inventory is a challenge, but the benefits are undeniable. Removing old inventory:
- Frees up space in the storeroom
- Makes a small ROI on an otherwise unprofitable investment
- Provides insight into what type of promotions are most likely to draw in customers.
Having this information available gives businesses direction as to what kind of products their customers prefer, leading them to make more responsible Inventory management decisions in the future.
Your bestseller is your best asset
Using a strong data analytics program provides business owners with a number of benefits—chief among them being the ability to identify your most popular item. By comparing relative sales numbers and profit charts of the items in your inventory, you can determine what of your stock is:
- Selling the most units
- Making the most profit
- Generating the most interest
From here, business owners can create and customize specialized promotions designed to attract more attention to this item. The beauty here is that the item itself is selling anyways; this means your goal should be to use them as a springboard to increase sales across the board. This is best done through promotions.
|Departmental discounts encourage sales across the board|
|You have a hot new board game in the “entertainment” department that is consistently generating sales every week. Savvy business owners should consider that customers will likely peruse the shelves there while making the final decision to buy that game. In response, they can run a special “10% off all home games” promotion. This encourages them not only to make the initial purchase on your popular game, but also to consider an additional game that maybe catches their eye.|
|Contests and giveaways|
|One of your best sellers has a single setback; it’s very expensive. This means that for every customer that buys it, there are many others who want it but can’t afford it. Business owners can use this as an opportunity to generate more sales by offering a giveaway contest; customers who purchase more than a certain cash amount can leave their information for a chance to win the high-ticket item. In this way, businesses can use their biggest sellers to move less expensive/popular items around it.|
Making these calls, however they are made, is only possible with a strong data analytics program. A good POS system should be equipped for this. For example, a giveaway on an unpopular item will naturally fail, as there is no inherent demand for the item itself. Doing the same on a popular but cheap item also doesn’t work because customers can just buy the item, removing the need for the giveaway in the first place. By zeroing in on the exact metrics of your inventory, your POS makes these options not only possible, but more effective.
Trimming the fat with regional specials
One of the biggest challenges in inventory management is keeping your stockroom moving. If items are not moving, then they are taking up valuable space that could be used for more valuable inventory. For this reason, business owners need to identify what their weakest products are to try and move them as quickly as possible.
Using a powerful data analytics program provided by your POS does exactly that—by identifying what you have the most in stock. Business owners can start to create specialized promotions around reclaiming that lost space in their stock room. This can take several forms, including:
- Discounts for the item in question
- Making the offer “limited time only” to generate interest
- Linking the item with your most popular one as a “bundle deal”
- Offering donations to charities for each sale of a given item
Utilizing these approaches not only moves your least popular items, but also does the general work of drawing customers into your store. This makes them more likely to buy other items in addition to the ones you’re trying to remove from your stock room. More importantly, it frees that space up, allowing you to start pushing more valuable items that you believe will move more quickly.
Seasonal promotions keep your business timely
Anyone who has walked through a department store in January knows exactly what this section is about; the remnants of Christmas lights and inflatable snowmen are likely still fresh in our minds at the start of the new year. These amusements, however, are real problems for businesses that face a difficult decision. Either hang on to your holiday inventory until next year when it will likely be out of date and damaged, or set it off at an incredibly low rate to keep your inventory moving.
By utilizing the data analytics programs available through a top-tier POS system, companies can preset seasonal promotions to minimize out-of-season inventory after the holidays. It works like this:
POS data analytics identifies and groups holiday items for easy application
Custom promotion parameters are set (date/time, discount type, recurring, etc.)
POS automatically applies discounts without managers ever needing to return to it.
Freeing up the space in your stockroom allows for more timely or seasonal inventory to be moved in. The fact is this is an ongoing challenge for any business; that inventory too will be out of season in just a few months and will need to be moved quickly. Therefore, businesses should seek to test these promotions regularly as a means to find out what drives their customers to their stores and what type of promotions tend to work best for them.
Data analytics help you identify your biggest resources
Cloud-based POS options feature several ways to move your inventory. Whether old, new, popular or not, centralizing your inventory management keeps your stockroom in flux. More importantly, it gives you insight into the minds of your customers; not only do you understand what items draw their attention, but you also learn what type of promotions they respond to. Knowing what makes your customers tick, then, starts and ends with a comprehensive POS.
Finding the right POS, however, isn’t always easy; some offer features that might not suit your industry, while others may charge too much or not offer enough. Providers like talech, on the other hand, suit their features to the needs of their customers directly. This ensures that businesses get the tools they need without the clutter of unnecessary bulk. Best of all, we offer a free demo, allowing you to experience our feature before you commit. Reach out today to learn how we can become your trusted partner.
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