Many retailers open their store with a minimum level of inventory, which is acceptable at first because you want to test the market first to see which products are moving and which are not selling as well. After this period, you should have figures that give you an idea of which products are fast moving. So you should start planning ahead.
First, do a monthly evaluation. Extract your daily sales figures and compile a monthly stock sales list. In your list, filter the stock from the highest selling product to the lowest selling product. This will make it easy for you to see your stock sales at a glance.
Then take note of the top sellers and how much of that stock you have left at the end of the month. If you are out of stock at the end of the month, you may need to increase your stock level the following month. Increase next month’s order with about 10% and then test again next month. If you still have stock left at the end of the month, write down how much stock you have left and make a decision to keep your stock level constant or reduce next month’s order. It is advisable that you keep the stock level constant until you see a drop in sales and popularity of that particular item.
Do the same for each of the products on your stock list. It can be a tedious task, but it must be done if you want to stay ahead of demand and your competitors. You should always make sure you have enough stock of a product to be able to make the sale. If you don’t have the product in stock, you’ll lose the sale, the customer will be disappointed and go to another retailer, most likely your competition. That could mean they may not come back to you next time because you don’t have enough stock of what they’re looking for. Sometimes, even if you don’t make the sale that day, you need to make sure you have enough in stock. Because after that customer has purchased, they might come back to you since you have that particular item in stock. In a case like this, that customer will keep coming back to your store to find that product and will also make additional purchases of other products you have on the shelves.
Therefore, it is very important for your monthly sales to ensure that your retail store has enough stock of all the popular products that you offer.