Stock control procedures are vital for retail stores to balance stock levels, meet customer demand, and maximize profits. An effective stock control system includes ordering the correct amount and quality of stock, receiving and storing it properly, monitoring stock levels, and having salespeople to sell goods. The stock control department works with marketing to forecast demand and purchasing to order stock. Stores must decide whether to carry little stock using a just-in-time model or hold more stock to meet changes in demand, based on the nature of goods and available storage. Key stock control procedures include unpacking and inspecting received goods, checking quantities against documents, recording stock levels, storing and pricing items appropriately.

1. PERFORM
STOCK
CONTROL
PROCEDURES
Introduction

2. Introduction - don’t type this.
We are starting a new topic today. It is
called Perform Stock Control Procedures. It is
examinable in the HSC.
Make a new folder in your files for this unit.

3. Stock control is a very important function
for a retail store.
Although stock control is not a money
making exercise in the same way as
customer service; it does save money,
increase profitability and is vital to the
success of a retailer.

4. The stock in a retail store means all
the goods that the retailer has with
the intention of selling them. It
includes all the items on the shop
floor, all those on display plus all the
items that are in storage. It will also
include those that are being used for
customer orders.

5. Stock control refers to the systems in
place to:
Order new stock
Monitor stock levels
Track stock movements

6. For a retailer to have an effective stock
control system then they need to have:
 Efficient systems for ordering stock
 Efficient procedures in place for taking
delivery of stock
 Adequate storage areas
 Appropriate display areas
 Professional salespeople to sell the goods
 Efficient systems for monitoring these
processes

7. How much stock to hold?
The aim of stock control is to minimise the
cost of holding these stocks whilst ensuring
that is enough stock to meet customer
demand.

8. Stock control is a balancing act. Stock
levels must be maintained in a way that
there is enough stock on hand to meet
customer demand; yet at the same time
holding too much stock costs money and
storage space.

9. Obtaining the correct balance is not easy
and the stock control department will work
closely with the purchasing and marketing
departments

10. Marketing department
The marketing department should be able
to provide sales forecasts for the coming
weeks or months and so allow those who
order to judge the type, quantity and timing
of stocks needed.
This can be difficult if demand is seasonal or
prone to unexpected fluctuations.

11. Purchasing department
It is the purchasing department’s
responsibility to order the correct quantity
and quality of these inputs, at a
competitive price and from a reliable
supplier who will deliver on time.
They will be informed by the marketing
department.

12. A retailer likes to have a high stock turnover
(i.e. a lot of stock coming in, being sold then
going out). This is how profits are made.
If high turnover can be achieved without
the retailer needing to carry a lot of stock,
then they have an effective stock control
system.

13. Holding little stock
A store may decide to hold very little stock
in the store and order items as they are
needed. This is known as just-in-time, where
goods arrive in the store just as they are
needed.

14. Advantages and
disadvantages
Advantages Disadvantages
Lower storage costs Potential loss of sales if you
don’t have the product when
the customer wants it
Flexibility in ordering a variety
of goods to suit demand
Reliance on suppliers to
deliver the goods
Keep up to date with new
goods
Hard to judge what is needed

15. Holding a lot of stock
Some stores may decide to hold more stock
that what is needed.

16. Advantages and
disadvantages
Advantages Disadvantages
Will have the goods when
customers need them
Costs of storage – rent,
security and insurance
Can meet sudden changes in
demand
Money tied up in stocks not
being used elsewhere in the
business
Easy to manage and plan for Theft becomes a bigger issue
Buying in bulk may be
cheaper
Certain goods might perish
Useful if sales are
unpredictable
Some goods may become
obsolete before they are sold

17. Which to do?
A retail store will need to decide which
method suits them the best. This decision will
be based on:
• the nature of the good, e.g. is it
perishable, is it a common good, the
demand for the good
• the storage space available

18. The stock control process
Stock control can be thought of as a
cyclical process as shown in the diagram on
the next slide.

19. Stock
ordered
Goods
received
Goods
processed
Stock sold
Stock
reordered or
discontinued

20. Receiving & processing stock
One of the most important parts to stock control
is the receiving and processing of stock.
There are various procedures a retail store can
use to receive and process stock. This is what
this unit will focus on.
I will teach these procedures as steps. But in the
exam they will not be referred to as steps but
procedures.

21. Step One
•Ensure the
receiving
bay is
clean and
organised
Step Two
•Unpack
goods
using
correct
technique
Step Three
•Remove
packaging

22. Step Four
•Check
stock
against
documents
Step Five
•Inspect
items
Step Six
•Record
stock

23. Step Seven
•Store
stock
Step Eight
•Dispatch
stock
Step Nine
•Apply
price
labels