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Inventory management is an important element entrepreneurial activity in retail. Competent and effective management aims to outlet was provided with goods in exactly the volume and quantity in which it is necessary for a certain period. Otherwise, there may be both a shortage and an excess of inventory, which is unacceptable from the point of view of business efficiency.

Types of inventory

Depending on what role and what functions stocks perform, they are divided into three groups:

• Current stocks. They ensure the continuity of the trading process and the uninterrupted operation of the store between deliveries.
  For example, in some store, supplies of dairy, meat, bread and confectionery products are carried out once a week on Wednesdays.

  Accordingly, there should be enough of these product groups in warehouses and on the shelves in the store - bread, milk, meat and "confectionery" - so that there is no shortage within a week from one delivery to another.

  At the same time, it is necessary to ensure that there are no unjustified surpluses with each subsequent delivery of goods.

• Insurance or guarantee stocks. These are the stocks that should ensure the continuity of the store in case of unforeseen circumstances.

  This may be a sharp increase in demand, including a temporary one, or a supply failure, for example, due to worsening weather conditions, if the store is located in a remote area, or due to other force majeure circumstances.

  When calculating and forming insurance stocks, it is necessary to take into account the expiration dates of goods, especially for food products.

• seasonal stocks. They are formed under the influence of the seasonality factor. This applies, for example, to agricultural products or shops selling clothes and shoes. It is obvious that in the summer season it makes no sense to buy and replenish stocks of winter clothes, but it is necessary to prevent a shortage or shortage of actual summer clothes and shoes.

Automation of maintenance warehouse accounting using the Business.Ru program, it will help you control the movement of goods in real time, manage their balances and stocks, minimize routine work with paperwork, and significantly reduce the number of errors made during typical warehouse accounting operations.

Reserve formation factors

The inventory formation process depends on the following factors:

1. Volume of daily sales of goods. Stocks in warehouses or store shelves and the volume of daily sales are directly dependent on each other. Daily sales volume or store traffic is the main factor influencing the inventory management system.

Obviously, if the store is not a checkpoint, then it is possible to purchase, of course, in compliance with the expiration dates, goods for some more or less long period (a week, a month), so that these goods are stored in a warehouse. Thus, you can save money by reducing logistics costs (delivery).

If, on the contrary, the store is located in a passing place, then the issue of the formation of supplies must be taken with the utmost seriousness.

This is especially true for food and other everyday goods: it is quite possible that you will need to organize a daily supply or even several times a day. Therefore, in such stores, the inventory management system should work clearly, without failures.

Commodity stocks: definition and types

2. Delivery speed. This factor is more relevant for retail when the store is located not in big cities - in villages, countryside or in geographically inaccessible places.

3. Availability storage facilities and necessary equipment in particular refrigeration. The warehousing factor is most relevant for retail when we are talking on the organization of the work of shops in cities, especially large ones.

The point is that, among other things, the efficiency of the retail business is influenced by the level of rent for the space used for the operation of the store.

Professional automation of goods accounting in retail. Tidy up your store

Take control of sales and track the performance of cashiers, outlets and organizations in real time from any convenient place with an Internet connection. Form the needs of outlets and purchase goods in 3 clicks, print labels and price tags with a barcode, making life easier for yourself and your employees. Build a customer base with a ready-made loyalty system, use a flexible discount system to attract customers during off-peak hours. Operate like a big store, but without the cost of specialists and server hardware today, start earning more tomorrow.

At the same time, it is necessary that the area of ​​​​warehouse space provides the ability to store the volume of stocks for the smooth operation of the store.

4. Product properties. Here we mean their physico-chemical properties. First of all, of course, expiration dates. The inventory management system should be built in such a way that perishable goods do not stay on the warehouse shelves, but their shortage is also unacceptable, especially for everyday food products - bread, milk and others.

When developing their own system for effective inventory management, an entrepreneur must consider all these factors together.

Inventory management

Effective inventory management solves two important retail challenges:

• Firstly, it is the provision of consumer demand, that is, the provision of buyers with those goods and products that they want to buy. Simply put, this means preventing a shortage of a certain product, product group and empty shelves;
• Secondly, it is effective management working capital, that is, the store's money. The fact is that goods are purchased with money, respectively, goods need to be purchased just enough to ensure uninterrupted operation in a certain period of time.

If you buy more goods than you need, this means withdrawing from circulation cash, which could be directed to other, more effective or more necessary goals.

Simply put, the solution of the second task means preventing excess stocks of goods and product groups in store warehouses and on shelves.

The Business.Ru warehouse automation program will help prevent excess goods in the warehouse. Manage the assortment, track the sales of specific products and, based on the received data, place orders with suppliers.

Inventory management system

The inventory management system includes the following elements or successive stages:

1. Rationing of commodity stocks. This is when the store determines how many of which goods, product groups and in what volumes and quantities should be in warehouses and on shelves. The main indicator in rationing is the flow of buyers;
2. Operational accounting and control of goods and stocks. It is necessary to constantly monitor the state of stocks in order to quickly respond to their changes;
3. Regulation of commodity stocks. This means maintaining inventory at the level established by the regulations. Actually, this is the purchase of goods when it is necessary to replenish the stock to the established standards. Or stimulate sales when there is a threat of overstocking.

Inventory management system or effective inventory management includes the continuous sequential execution of these steps.

There are two inventory management systems:

1. System of the fixed size of the order (delivery). This means that the store always orders delivery in a well-defined volume and quantity.

In this case, the delivery period is not defined. The entrepreneur makes an order for the next supply when the availability of that product has reached a certain regulatory threshold. Reduced stocks to a certain level - made another order.

2. Fixed period system. With this inventory management system, unlike the first, deliveries are made according to a certain fixed schedule.

The entrepreneur solves two problems: firstly, how to make sure that the level of stocks in warehouses is equal to or close to the standard indicator by the date of the next delivery; secondly, he must make such an order that by the next delivery the level of stocks will again be equal to or close to the standard.

The choice of inventory management system depends on many factors: the specialization of the store, the level of demand, the method of accounting for goods, and others.

Inventory management: turnover, stock turnover

To build an effective inventory management system, it is necessary to constantly monitor and analyze the state of the warehouse and shelves in the store. This is done by determining the turnover of goods.

Turnover or turnover is an indicator that characterizes the intensity of the trading process and, in general, the intensity of the business. Simply put, it is the rate at which a product is sold.

More precisely, turnover is the intensity or speed with which the goods go through the stages "Purchase - Storage in a warehouse - Sale".

Comprehensive trade automation at a minimum cost

We take a regular computer, connect any fiscal registrar and install the Business Ru Kassa application. As a result, we get an economical analogue of a POS-terminal as in a large store with all its functions. We start goods with prices in cloud service Business.Ru and start working. For everything about everything - a maximum of 1 hour and 15-20 thousand rubles. for the fiscal registrar.

Also, the turnover or turnover of goods is an indicator that characterizes the effectiveness of the money invested in the business, that is, how quickly the money invested in the purchase is returned through the sale.

Obviously, the greater the turnover or turnover of goods, the greater the profit of the entrepreneur: each turnover of money carries a certain profitability, and high level turnover suggests that there are more such turnovers of money, which means more profit in rubles.

Fear of not being on time can have a very strong influence on buyers. A split test by WhichTestWon found that when placing a timer countdown on a product page, it attracted 9% more customers than a product page type without using such a program.

Create a sense of urgency in your website visitors and it will more people shop right away, not "go home to think it over."

There is a high probability that your website visitors will delay and put off buying decisions. According to research conducted by the Center De Recherche DMSP, consumers who tend to make a choice later in 73% of cases do not make a purchase immediately. However, even buyers who like to make quick decisions do the same in 26% of these situations. But if you indicate that the product or time is limited, the chances that customers will delay the purchase until later are reduced.

In a study conducted by DigitalCommons at the University of Nebraska in 2013, 14 shoppers were monitored and interviewed. Participants in the experiment shopped at a variety of stores, most of which used a perceived scarcity strategy, such as a limited supply or a sale time. Research has shown that in retail stores Those who use this technique, customers succumb to the following psychological effects: competition among customers, urgency to purchase, a limited number of units in the store, and putting off for later, in fact, unnecessary things.

While you don't want to turn site visitors into quick buyers, there is still a desire to get people to take the necessary action quickly. In this case, shortage will come in handy. You can create a tangible shortage in the store by creating a limited number of units of goods or time.

In this article, I will talk about two types of shortages that you can create in your store, and show some working examples of creating urgency.

Limited time discounts and special offers

Creating a time limit is one of the easiest and most effective methods organizing urgency and shortage of goods in your store. The reason is that buyers do not want to miss the chance to take advantage of a great offer. For example, an ending sale or special offer can force customers to make decisions faster than they normally would.

In a study by DigitalCommons, this is associated with the theory of fear of loss, when most people rather simply avoid losses than make a profit. Limited time winds up the psychological mechanism.

Do hot sales

Pet Pro Supply Co. on its site very often makes hot sales, offering extremely limited-time discounts on selected products.

Also Pet Pro Supply Co. has a separate hot sale page prominently on its website. The product page is optimized for such events, you can see the discounted price on it, and more importantly, the exact date and time of the end of the sale. This reminds the person browsing the product page not to hesitate or they will miss out on a great opportunity.

Place countdown timers on the product page

Instead of just showing a sale end date, put a countdown timer on your product page. This is what the MakersKit online store does when they display products for this event.

Such visualization helps to increase the effectiveness of feeling the lack of time for a certain sale.

While limited time sales work well, they are not the only way you can use to create urgency.

Create delivery offers for a specific period of time

Offering express shipping or even free shipping for nimble shoppers is another great incentive. Fab&GO, online store women's clothing, for fast customers, offers the option of next day shipping.

If a customer wants her shoes shipped by tomorrow, she needs to order within the next 5 hours.

Also fast enough buyers can deliver the goods for free. Kit Out My Office, an online office furniture retailer, uses a countdown timer at the top of their website. This constantly reminds web resource visitors that if they want fast and free shipping, they need to order within the next 2 hours. So customers will not postpone the purchase until later or forget about it completely, as often happens.

Ideally, you want a customer to make a purchase the first time they visit your site. The reason is that even if he is very interested in buying, there is little chance of returning again. According to MarketingSherpa, online retailers say that only 30% of their traffic comes from returning shoppers.

Limited quantity

You can use shortages to your advantage. Instead of seeing limited inventory as a potential selling problem, look at it as a way to show limited inventory and increase perceived value.

Show stock quantity

The easiest way to do this is to simply show the stock of the product directly on its page and thus draw attention to the number of units left. Tradlands, a women's t-shirt shop, successfully uses this method and displays the number of products when choosing a clothing size on the website.

Tradlands also creates a sense of urgency through the product description. A phrase like "Hurry up, there's only one left" works much more effectively than "In stock: 1".

In a similar way, the remaining quantity of goods in the warehouse is displayed in Retro City Sunglasses. On the product page, as well as in the section dedicated to glasses, it says: “Almost out of stock!”

Sell ​​limited quantity

Another way to create shortages is to tell customers how much you are going to sell instead of how much is left. In most cases, this strategy works best when selling "limited edition" or "limited edition" products, if the company manufactures and sells a certain number of them.

For example, Mindzai sells limited editions of some of its toys.

In this case, we see that Mindzai is going to create and sell only 100 units of products. Such a quantity will not make them an object of hunting for collectors, but will be sufficient to create a limited number of goods.

Use all the ways to create a sense of lack

In order to create a sense of scarcity, you do not have to limit yourself to only indicating a limited number of goods on its page. The style of speech you use on your site, promotional materials, and emails can also create urgency.

Just take a look at this e-mail I received from Mizzen+Main once. Pay attention to how the company describes their shirts. Instead of a simple “Hey, we have new shirts in the store, come take a look”, Mizzen+Main makes me visit their online store right away with the phrase “They sell out terribly fast!”.

They also confirm the limited number of products with the words at the end of the e-mail: “This latest product has become the fastest-selling product in our history. Hurry up!

As I mentioned before, the way you describe products or the phrases you use to attract customers can also create a sense of limited supply. For example, at the top of the JerkySpot website page is a call to action "Order Now" but it also says "Limited Quantity".

Telling your customers that your product can sell out at any moment will help create a sense of fear and urgency. Clients do not want to regret later that they did nothing when they had such a chance, so the correct presentation of the site helps to remind them of this.

Use the scarcity effect wisely

In the end, it is worth remembering that great influence always goes hand in hand with great responsibility.

With the right product and customer, a shortage can work very well. However, creating a false limited number of products or trying to deceive people is not the best solution.

An apparently fabricated shortage can turn customers away from you and harm your brand's reputation.

The limited amount of product you create has to be based on something. Why are these t-shirts sold for a limited amount of time? Why is the product in a limited edition? You can't just set a countdown timer and hope you sell more. This device must display an ending sale or special offer (for example, next day shipping).

At the same time, the effect of scarcity is not always a panacea for bad sales. First of all, in order for it to work, there must be some kind of need for your products. For example, when Apple releases new phone or a tablet, the demand for the company's products exists even before that. The limited number of manufactured products of the company simply increases it and enhances the seductiveness of the products.

And finally, don't overdo it. You don't want it to look like pressure on your customers. The primary function of perceived scarcity is to make procrastinators make their decision faster, not to force people to buy what they don't want. If you use the sequence of creating such a strategy incorrectly, this can lead to buyer's remorse syndrome.