I will share with you the concepts and strategies that I have successfully implemented to manage my inventory in the past. However, I will not be providing magic formulas new to this industry. Wish I had some!
But I can tell you that it can be done. You can achieve unprecedented metrics for your company by applying the following strategies. The three critical areas of inventory management are Replenishment, New Purchasing and Aged Inventory.
All three areas are of equal importance. Focusing on one and neglecting the other two will not get you the results that you want. This month we will be reviewing Replenishment.
Have the styles your customers want — when they want it.
There is very little that is more important than managing your most valuable asset – your inventory.
I will share with you the concepts and strategies that I have successfully implemented to manage my inventory in the past. However, I will not be providing magic formulas new to this industry. Wish I had some!
But I can tell you that it can be done. You can achieve unprecedented metrics for your company by applying the following strategies. The three critical areas of inventory management are Replenishment, New Purchasing and Aged Inventory.
All three areas are of equal importance. Focusing on one and neglecting the other two will not get you the results that you want. This month we will be reviewing Replenishment.
All three areas are of equal importance. Focusing on one and neglecting the other two will not get you the results that you want. This month we will be reviewing Replenishment.
Replenishing your fast-selling merchandise is like fuel for the engine of a car! No matter what, you will always need to have available dollars to replenish the product that is flying out your door. We tend to get bored long before the client gets bored from a style. But we need to put aside our opinions and remember that our job is to give our clients what they want, and there are many styles that just keep selling. You’ll want to replenish your best-selling styles before you consider any new purchasing.
Here are 11 tips to make sure you’re replenishing properly:
- Make sure that your projections for your shelf stock is realistic, not best case – your vendor won’t want to continue if the product is not moving off the shelf.
- Invest time and effort to categorize your best sellers so you can manage them efficiently.
- Monitor your never-out SKUs monthly to identify a downward trend, and evaluate whether to discontinue.
- Your replenishment strategy can also be a way to increase profits. Target your high-profit categories and replenish them first if you don’t have enough dollars for everything. Leverage your high-profit SKUs by carrying them in other versions, or expand the assortment.
- One profit opportunity is to re-mark your inventory based on current cost – not what you paid on all your replenishment SKUs. While you are doing this, look at the piece with perceived value in mind, and you might mark it up even further.
- Putting time, energy and focus into replenishing your stock requires discipline and dedication. But the financial rewards can be significant. There is probably no greater factor in increasing your inventory turn than replenishment. And, inventory turn is what generates cash flow; it is what pays the bills.
- You will increase your sales by having in stock the product that your clients want – if you don’t have the style they want, they will go somewhere else to purchase it.
About the Author
Sally Furrer is a merchandising consultant with 20-plus years of jewelry industry experience. E-mail her at sallyfurrer@gmail.com, or visit http://sallyfurrerconsulting.com. Meet Sally at The SMART Jewelry Show, at Chicago’s Navy Pier from April 21-23, 2012. To register, go to smartjewelryshow.com/register
This story originally appeared in the March 2011 edition of INSTORE