How to avoid costly inventory mistakes

1. $48.9 billion
Cost of inventory “shrink,” including
thefts from retailers, in 2016
Source: 2017 National Retail Security Survey (National Retail Federation)
In the retail world, knowledge is power. You need to know your inventory levels
before you can start selling products. Mistakes regarding inventory can cost
you a lot in lost sales or lost inventory. Here are some of the most common
inventory-related mistakes retailers make:
Common And Costly
INVENTORY MISTAKES
To Avoid
DOING EVERYTHING BY HAND
Without automated inventory management software,
there’s a much greater chance for mistakes to be made.
A barcode-based system can simplify and significantly
improve your tracking methods.
NOT OPTIMIZING PRODUCT DISPLAYS
Taking inventory of your store entails more than setting
aside enough time during off-hours. It also means making
sure your shelves are well-organized and all of your
products are easily seen.
HAVING TOO MUCH INVENTORY
When inventory doesn’t move quickly, it can depreciate.
There’s also the added cost of that clutter cutting into
your valuable space.
TRUSTING EMPLOYEES TOO MUCH
It’s painful to hear, but retailers must take the threat of
internal theft seriously. Requiring bag checks at the end
of shifts or storing employees’ belongings in a centralized
location can help reduce losses.
NOT PROVIDING ADEQUATE TRAINING
No inventory procedure can be expected to work if the
employees conducting it don’t know what to do.
NOT CHECKING INVENTORY OFTEN ENOUGH
If you wait too long between inventory checks, it
becomes much easier for details to fall through
the cracks. Performing checks on small groups of
merchandise regularly provides you with the most
up-to-date information.
IGNORING THE THREAT OF SHOPLIFTING
Shoplifting can seriously dent your inventory if you don’t
implement preventive measures. Train employees to
recognize shoplifters’ behavior and make sure your store
is laid out to increase visibility as much as possible.
PUTTING TOO MUCH FAITH IN
THIRD-PARTY SERVICES
Simply hiring an outside service to conduct inventory isn’t
necessarily enough. Retailers should continue to prepare
for an inventory as if they were conducting it on their own
to be sure nothing is lost in translation.
NOT HAVING A CONTROL SYSTEM FOR
INVENTORY WHILE THE STORE IS OPEN
Sometimes it’s necessary to conduct inventory
during business hours. In that case, there must be a
control system to prevent miscounts or other issues
that might arise.
HAVING NO PLAN FOR UNMARKED INVENTORY
Unmarked items that are found during an inventory can
create problems. Have a plan in place for dealing with such
items before starting an inventory.
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