Tips for retailers to generate better return on their Inventory
More sales don’t always translate to more profit for the company.
One sure shot way of ensuring a healthy jump in profitability is by ensuring right inventory management practise.
Knowing what’s in your inventory and how to control it is good for everyone’s business.
If you are a supplier, retailers want you to offer better communications, cooperation and service.
Retailers consider these far more important than lower prices.
We expect the operating costs of retail stores to continue increasing over the next decade.
One way to help cope with soaring expenses is a program designed to get more profits out of money invested in inventory.
Retail stores have shown a trend toward decreasing net profit per inventory money over the last 4 years, and this trend must be reversed.
Progressive retail stores are taking steps to speed up inventory return by:
- Cutting back on slow-moving items,
- Concentrating money on items that have the greatest potential, and
- Making sure that stock levels rarely exceed immediate need.
The made to order department is especially well suited to an inventory system aimed at higher turns by thinned inventory.
Another means of getting better return on inventory money is the open-to-buy system. Decreasing the amount of direct buying and purchasing more from a wholesaler can be a way of avoiding excess inventory.