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Retail Inventory Management - Challenges & Solutions

Pitfall #1: Setting up for failure

Inconsistencies in SKUs can cause trouble in locating and shipping the right item. A standardized system for naming SKUs makes order fulfillment much smoother. Usage of barcodes is one of the best ways to keep track of your inventory levels.

Pitfall #2: Bad storage

How you store and distribute your inventory across retail stores is crucial. The storage should be suitable for both online and offline distribution. In addition to it, your warehouse must be well-organized on the inside.

Brick and mortar stores should have a designated area for walk-ins and a suitable storage area. Follow the “First-In, First-Out (FIFO)” process in organizing the shelves and positioning your merchandise. Placing older merchandise in the front ensures it moves first and helps keep the stocks fresh.

Pitfall #3: Channel-specific inventory

It is a bad idea to separate inventory by channel. This may lead to unnecessary duplication of stock, and a lock on your working capital as all the channels may not have the same turnover rate. Combining the inventory into a single entity and using it to distribute across channels according to their performance might be the best course of action.

Pitfall #4: In-store stock allocation to online sales

When fulfilling orders through your store’s stock, be careful where limited quantities are involved. You end up losing your own sales. A walk-in customer will have first dibs on a particular item, and an online customer who ordered the same thing will see his order get canceled. To overcome this situation, you can under-commit fast-moving goods to online suppliers while maintaining a steady-reordering pace.

Pitfall #5: Uninformed store employees

Store employees should have a grasp on the availability of items at all times. If the inventory is considerably large, equip them with a tablet to locate the item in your warehouses or other stores. They can also use it as a means to place a customer’s online order on behalf of them.

Pitfall #6: Channel-specific returns

There may be scenarios where a customer places an online order for an item not available in the store, receives it through your shipping partner, and returns it at a different store.

It is important to have the same customer records across all your stores and online channels to be prepared for such situations. This helps in tracking returns and exchanges across the board and maintaining correct inventory records.

Pitfall #7: Ignoring stock takes

Despite your first-in-class processes, at times, system figures may not be accurate. Events like breakage, pilferage, or some complicated returns may not be entered into the system.

Make sure to supplement your systems with regular manual checks. Conducting stock audits help in ensuring your physical stock matches with your system numbers. Do not make stock reconciliation an annual event!

Other useful tips for retail inventory management: -

· Regular inventory maintenance- check for damages, etc., and keep replacements handy.

· Provide supplier support across multiple locations 24x7.

· Dropship only from reliable partners, or else you may have to deal with disappointed customers due to issues that may stem from not having stocks.

· Set a higher reorder point so that you can replenish your inventory for fast-moving items.

Facing any issues related to inventory management? Relax, x2x eCommerce is here to help you. Your problems can be solved with stability, consistency, and affordability. Contact us at or 888-929-3266 and get a FREE 1 Hour demo today!


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