Retail Stock Management - Why it Matters
Good stock management is an essential part of any well-run e-commerce operation. E-commerce expert David Trounce examines some of the available stock management tools.
Regardless of the type of business model you adopt in retail, whenever you have stock you will always need to count and manage it.
Stock management or inventory management is basic to good accounting, good customer service and good internal business management.
Monitoring and controlling the availability of raw materials and resources helps to ensure that order processing is as smooth as it can be for both business and customer. Thankfully today, there are a plethora of tools to help you do this.
Yet, many businesses still fly by the seat of their pants and later wonder why business did not succeed as they thought it would.
The cost of poor stock management
Michael Ames, in his book Small Business Management, places poor stock management third on his list of reasons for small business failure. Likewise, ACCA Global places overstocking second on its list of 65 contributing factors to business failure.
Managing stock allows businesses to determine whether the raw materials and other resources are adequate to maintain the current level of trade.
According to Adam McDean from BusinessBasics Australia, “Inventory management is a key internal management process for the large majority of retail business owners and without it, a business soon descends into chaos.”
Stock inventory coordinates internal management systems and helps avoid unnecessary purchases on the part of the business owner.
Soft technology makes stock management easier
In the past few decades, the rise of digital — and especially online digital technology — has changed the whole retail industry.
When it comes to stock and inventory management, one of the greatest boons of technological development is the availability of stock and inventory management software.
Stock and inventory management software works the same as traditional inventory management as it has traditionally been practised in physical or bricks-and-mortar stores.
Software like MYOB EXO and others have become affordable world-class solutions to many of the logistical issues that retailers face in the management of everything from human resources to everyday stock acquisition and monitoring.
Far from putting such advanced technology out of the reach of mid-size retailers, it has actually made management easier and more accessible to them.
Increasing sophistication in stock management has created simpler tools for smaller retailers and enterprise.
Calculating the efficiency of your stock management
Simplified tools are also available to allow for effective cost calculation and evaluation of your current stock control systems.
Indivia Australia is one example of this. Indivia, in collaboration with Gorilla 360, has created an inventory management automation cost-saving calculator to assist business with stock management.
Stock control lets both consumer and retailer know the availability of resources. It helps with cashflow management, planning, budgeting and more. Most importantly, it enables retailers to supply what was promised.
Typically, poor stock control extends beyond cost management and includes:
- Errors in pricing
- Warehouse congestion
- Stock write-offs
- Shortages in production
- Delays in shipping and handling
- Customer complaints
Inventory management guards against the problem of overstocking and either the resulting waste from products that don’t fair well in storage or the reduction in available cash on hand.
It also keeps businesses moving and regulated and enables them to spot problematic trends in cash flow and logistics.