Inventory Turns is a key metric used in the retail industry, and is considered to be the number of times the inventory cycles or is replenished throughout a year. This can be calculated by dividing your average annual cost of goods by your average inventory.
For example, if you sell widgets with an annual cost of goods of $1 Million, and carry an average inventory level of $250k, then your inventory turns is 4.
There are a number of tools within Counterpoint SQL that will allow you to increase the number of turns and decrease your average inventory level, thus increasing your sales and profits. These tools include, but are not limited to:
- The identification of slow moving products
- The elimination of low-profit items
- The automation of purchasing processes
- Identification and promotion of high-profit items
By accomplishing the above objectives, CounterPoint SQL will give you the information you need to make purchasing, vendor management, and sale/mark-down decisions.
In the example above, if this company were to decrease the average inventory to $200k (by 20%), and increase cost of sales to $1.2 Million (roughly 20% more sales), their turns would have increased from 4 to 6! This is entirely possible with the proper use of the many features within the software.
Contact CCS Retail Systems, Inc. today for a demonstration of the specific features that can positively affect your bottom line!