The expression “take stock” is a well-worn idiom meaning to consider first and act later. But it’s quite remarkable how many businesses don’t set aside the time to consider how decisions on stock control can affect the profitability and cash flow.
Successful retail incorporates a whole variety of operating issues relating to the topic of stock. You might like to consider the following questions and their impact on both your business and your pocket.
1. Why do you maintain the inventory lines you currently stock?
2. What factors determine the shelf position of each line of stock?
3. How many items of stock do you sell each month and what is the relationship between this number and the position & amount of items held in stock?
If the answer to each of the above 3 questions is “because we’ve always done it this way”, then you’re tying up cash that could be put to much better use invested elsewhere in your business.