Striking a healthy balance between merchandise and cash is increasingly calling for putting leaner practices in place in 2017: unnecessary expenses can be quickly trimmed by reducing excess inventory. The cost of carrying inventory increases operational costs while decreasing profit, so establishing inventory types and their movements, as well as identifying supply and demand patterns, allows independent retailers more room to manoeuvre.
Here are 3 ways UltiSales’ detailed reports help the independent retailer streamline stock-holding:
- Top X Reporting: Setting sales goals is a recognised practice for independent retailers, and ensuring the correct amount of inventory on hand to service these goals means identifying what sells and when. Applying 80/20 thinking to the inventory may be a helpful approach. This principle holds that eighty percent of sales will arise out of twenty percent of the products: they are essentially repeat purchases. UltiSales’ Top X reports per item, category, and department ensures visibility of categories and products comprising the bulk of sales, meaning retailers can strengthen their store’s 20% offering to get as big a chunk of these sales as possible.
- Gross Profit Reporting: Sales and stock performance over previous weeks and months are central to projecting future sales and turnover. Many independent retail stores are subject to seasonal trade fluctuations, so calculating a turnover period specific to a particular store is important to shaping inventory holding. Depending on store size and operations, retailers can also choose to align their inventory more closely with their suppliers’ capabilities. UltiSales’ gross profit reporting breaks down into item, category, department and sub-departments, so independent retailers dealing with smaller scale manufacturers and suppliers can better define their inventory cycles, and adjust their ordering for maximum gain.
- Calculating Inventory Days: Owing to its size, the independent retail store is among the least able of retailers to carry the costs of abundant stock sitting on shelves. Typically, the cost of carrying a lot of stock outweighs any benefit or savings associated with a ‘bulk buy’. Timing purchasing to coincide with inventory turnover rates offers a more profitable return: not only does the stock sell faster and put money back into the business; retailers can also ensure they supply fresh merchandise to their customers, which is always a drawcard. Inventory days (or turnover rate) are the average amount of days stock stays on your shelf, and is calculated by dividing the Inventory Cost Value by the Cost of Goods Sold within a specific period.
UltiSales’ flexible reporting allows independent retailers to calculate their required inventory needs, and to tie this back to the store’s actual and projected performance. The level of reporting detail also allows independent retailers to exploit their size and agility advantage over corporate retailers, by continual fine-tuning of the amount and type of inventory they hold, and add to their profitability.
UltiSales’ proven track record over 30 years throughout Southern Africa is supplemented by ongoing development configured to retailers’ needs. UltiSales is an industry leading retail management and point of sale solution that supports retailers, from single-user stations through to large multi-lane installations. UltiSales is developed by UCS Technology Services and sold and supported through their Channel partners.
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