The first part of the year, I wrote about how to pare down inventory to help your bottom line. But there’s one rule to remember while your doing it….Never Run Out of Best Sellers. That should be self-evident but sometimes it’s overlooked.
When you don’t have basic, best-selling items in stock in the sizes and colors customers want, at times they want to buy them, your customers may start thinking they can’t count on your store. They might not tell you they’re mad. They’ll just go online or to your competitor to find what they need. The next time, they’ll likely go where they had success finding what they wanted the last time.
Inventory Again: Is The Following Situation All Too Familiar?
There’s too much stock on-hand in items that are not selling leading to a cash flow pinch. Money is sitting on the selling floor, not in the bank account. Compounding the problem is new stock rolling in that was ordered last quarter that must be paid for now. The cash flow pinch plus the looming bills causes you to stop reorders.
Immediate Result: Too many "dogs" and new experimental items on the floor and not enough basic best sellers.
Which Results In: Lower sales, even less available cash, lower customer loyalty and smaller profits.
Even if your stock levels are too high overall, always buy the best sellers. By definition, these items are what your customers want, need – and most importantly – buy when they’re in your store. Make sure you have those items in stock.