When making efforts to grow business, retailers often begin with adjusting factors such as price and materials. Although important, these changes may not give you the serious growth you’d like to see in your retail store, and can impact your product quality. Fortunately, there’s one essential component that can both lower your costs and increase your sales if executed correctly, giving you a greater profit margin than ever before: retail inventory management. Here are the top four ways that retail inventory management improves your bottom line.
- Lower Merchandising Costs
Perhaps the most substantial benefit of retail inventory management is the decrease in merchandising expenses. As a business owner, your unsold inventory costs can exponentially grow and quickly eat up your bottom line if not managed.
Retailers who invest in the proper inventory management software will gain the visibility they need to make data-driven decisions that help control merchandising costs. Pull reports automatically that can show inventory trends at the click of a button, including which products aren’t selling well. Armed with this information, retailers can make better purchasing decisions that allocate more capital to products that are quickly moving and less to slower moving products.
- Decrease Labor Costs
Merchandising costs aren’t the only expense that retail inventory management can cut down; the proper management will also lower your retail labor costs. If your inventory operations are automated, your employees won’t need to spend nearly as much time doing manual processes. Tasks such as counting stock, looking for inventory, and data entry can all be streamlined with the right inventory management software. This will not only improve your accuracy, it’ll also help optimize labor costs, allowing you to redistribute labor to the areas where it is most needed.
- Increase Multi-Channel Revenue
The right retail inventory management software allows your business to have all of their data consolidated and synchronized into one central location. This permits retailers to streamline operations and enables the implementation of new selling channels, since inventory can now be managed in real-time. This in turn opens doors for new revenue streams for your business. So in a sense, the right retail management software will simultaneously decrease your costs and increase your profits, giving you a much higher profit margin than ever before.
- Boost Sales and Increase Loyalty
Slow-moving stock isn’t a sign of weakness, it’s a sign that your inventory needs to be managed more strategically. Instead of letting stale inventory eat up your merchandising costs, retailers can use an inventory management solution to help get them out the door. The right inventory system allows you to see what inventory isn’t selling, so that you can plan accordingly. Retailers can leverage their loyalty program to promote their lingering stock with additional loyalty points or savings, benefiting both the retailer and the customer.
The right retail inventory management software will help deliver the products and customer experience that keep your business booming– both today and in the future.
As a retail owner, you’re often faced with decisions on how to innovate and grow your business for both short- and long-term benefits. This year, don’t overlook the importance of proper retail inventory management. If prioritized, this critical factor can provide benefits that streamline operations and increase your bottom line. If you’re looking for guidance on how and where to jumpstart this process, contact Auto-Star today.