Inventory management is not only important for retailers, it’s one of the most important aspects in running a successful wireless retail business. According to SCDigest, U.S. retailers are holding approximately $1.43 in inventory for every $1 of sales they capture.
More than just the physical practice of ordering, receiving, and returning inventory, an efficient inventory management process can help you plan, control, and organize goods. And although laying the ground work and establishing an efficient process may take time, it’ll be sure to provide invaluable benefits for the long term.
An efficient inventory management process means truly managing what you’re ordering to ensure that you order only what you need, when you need it. The key is having the right inventory at the right time to give your customers the options they want without being stuck with too much excess inventory at the end of the day (week, month, product lifecycle.)
Wireless’ Relationship Issues
Wireless dealers are faced with a unique challenge in that every item has a relationship to another in the store (i.e. a case only goes with a specific phone.) This adds a layer of complexity to inventory management for wireless dealers because phones have a limited lifespan. Dealers need to tailor their stocking practices to factor in that a device and its related accessories will likely be obsolete in 6 months. With efficiencies tied to inventory, cash flow is freed up to bring in the latest and greatest rather than flushing that cash down the drain with old stock. Features such as Product Library in RQ maintain the relationship of products, such as case to phone, to help with this inventory challenge.
In Data We Trust
To ensure they can meet the needs of each customers wants and needs, we often see wireless retailers over-ordering inventory. Whether you’re scared of not having enough or just not sure what to order, this can be managed with having true insight into what is happening with your inventory. If you factor in the cost of excess stock waste versus missing a sale or two, which makes the most sense? Better yet, to mitigate both inventory risks and losing a sale, you could implement a drop ship program to ensure you never miss a sale whether you have the stock or not.
In summary, investing effort into ensuring your inventory process is managed properly can help reduce costs (and waste) and free up cash flow to purchase items your customers want to buy, increasing your overall profit.
Learn more about inventory practices and how to become a data-driven organization at the iQmetrix Meetup, September 17-19, 2017 in Scottsdale, AZ.