There is very little that is more important than managing your most valuable asset — your inventory. You can achieve unprecedented metrics for your company by paying special attention to the three critical areas of inventory management: Replenishment, New Purchasing and Aged Inventory.
Putting time, energy and focus into replenishing your stock requires discipline and dedication. But the financial rewards can be significant. There is probably no greater factor in increasing your inventory turn than replenishment. And, inventory turn is what generates cash flow; it is what pays the bills.
Follow this process:
- Replenish weekly, without fail. This might be the most important point, period.
- Break out your open-to-buy by replenishment dollars and new purchasing dollars.
- Make sure that you are replenishing in concert with your strategic plan. For example, if you want to build your bridal business, be aggressive in replenishing those SKUs.
- Review reports that identify quick sellers, and measure the days it took to sell.
- Flag programs such as wedding band grids, diamond stud earrings, etc. as never-outs, and replenish these automatically.
- Factor in lead time when placing orders — you may need to order multiple units to assure an in-stock position at all times.
- For high-velocity SKUs, ask your vendors to shelf stock — for them it is a guaranteed sale, and you get 24-hour delivery.
- Make sure that your projections for your shelf stock is realistic, not best case — your vendor won’t want to continue if the product is not moving off the shelf.
- Invest time and effort to categorize your best sellers so you can manage them efficiently.
- 5 Monitor your never-out SKUs monthly to identify a downward trend, and evaluate whether to discontinue.
Your replenishment strategy can also be a way to increase profits. Target your high-profit categories and replenish them first if you don’t have enough dollars for everything. Leverage your high-profit SKUs by carrying them in other versions, or expand the assortment.
One profit opportunity is to re-mark your inventory based on current cost — not what you paid on all your replenishment SKUs. While you are doing this, look at the piece with perceived value in mind, and you might mark it up even further.
Replenishing your fast-selling merchandise is like fuel for the engine of a car. No matter what, you will always need to have available dollars to replenish the product that is flying out your door. Put aside your opinions and remember: Your job is to give clients what they want, and there are many styles that just keep selling.
Start marketing your jewelry store with SnapRetail and promote your products through email, social, and online to get your inventory turning!
If you would like more guidance and strategies for your business, please reach out to the Edge Retail Academy and we are happy to assist you. If you are interested in a complimentary business opportunity analysis, please let us know that as well. 877-569-8657, ext. 1 or Becka@EdgeRetailAcademy.com