Tips and Tools for Retail Inventory Tracking and Management

The success of every retail business depends hugely on appropriate inventory management. Optimising your supply chain will provide you with the visibility to make accurate decisions regarding the inventory management trends that are affecting your business.

Inventory management helps track commodities from the time of purchase through their duration of usage. Perfect inventory management systems include a complete and comprehensive record of materials that can be tracked and used efficiently. Since every inventory is an investment that incurs ongoing costs including storage, space, management, and insurance. Ideally, the best inventory management practices focus on maintaining the right inventory levels to avoid downtime with a minimal amount of inventory to manage, store, and insure. We are aware that point of sale (POS) systems is the ‘heart’ of every retail business and barcode scanners act as the perfect tool for inventory tracking and management.

In this blog, we have enlisted some proven tips and essential equipment for retail inventory tracking and management.

Let’s begin!

What is Retail Inventory Management?

As the term implies, retail inventory management is the process of ensuring that you are equipped with all the merchandise that the customers want in the right quantity. Managing inventory allows retailers to meet customers’ demand without running out of stock or carrying excess quantities of commodities.

Implementing retail management effectively lowers overall costs and provides a better understanding of sales patterns. The tools and methods involved in retail inventory management provide retailers with more information on running their business seamlessly. Some of the information includes:

• Product Locations
• Quantities of each type of products
• The stock that sells better and the ones that don’t, based on location and sales channel
• Profit margin based on style, model, product line or item
• The ideal amount of inventory to have in back stock and storage
• The products that need to be reordered and their frequency
• The time to discontinue a certain product
• The impact of changing seasons on sales

Benefits of Retail Inventory Management

To increase profits, retail inventory management is crucial for retailers. They can have sufficient inventory to track every possible sale, minimising expenses and avoiding overstock.

Effective inventory management in a retail business helps:

• Minimise Inventory Costs: Having an overview of the stock you have and the quantity of stock that you need can help you determine the inventory levels accurately. This helps minimise storage and carrying costs for the additional merchandise. At the same time, there are other means to save costs including shipping, logistics, depreciation, and other opportunity costs that are associated with not having an alternative product that might sell better.

• Minimise Out-of-Stocks: For better customer service and minimising sales, you need to ensure that your products are always in stock. Using inventory management tools, you can determine the right amount of stock you need to have with you. The quantity will be large for bestselling products compared to unpopular ones. Also, through real-time data on stock and sales, you can take prompt actions by re-ordering, transferring stock from one location or dropping shipping to your customers.

• Enhance Profit Margins: You can increase profitability by lowering inventory costs and having enough supply to fulfil every order.

• Prevent Spoilage: Perishable products such as milk and meat have a limited shelf life whereas non-perishable products become obsolete due to changes in customers’ tastes and technology. Through appropriate inventory management, retailers can deal with products that expire or become obsolete. For example, the introduction of a new feature to any consumer technology plummets the demand for older models. This makes the older models obsolete.

• Enhance Multi-channel and Omnichannel Performance and Order Fulfilment: If you own an online store, a brick-and-mortar store, and selling via any third-party merchant, keeping a track of your inventory across all channels can be challenging. Having access to your inventory data across all selling channels allows you to manage your inventory efficiently, which in turn, would help you provide the utmost customer satisfaction.

• Simplify Processes and Facilitates Growth: Since effective inventory management reduces friction in your system, your sales would grow. Not only can you ship, receive, and order smoothly but you can also minimise errors, rectify customer complaints, and eliminate staff stress.

• Minimise Shrinkage: Shrinkage involves the loss of inventory due to product damage, shoplifting, vendor errors or fraud, employee theft, and administrative errors. Having strong retail inventory management can reduce shrinkage by up to 50%.

• Ease Supply Chain Management: Having command over sales and inventory trends will help you manage your supply chain better. Using a retail inventory management system would help you determine your economic order quantity (EOQ) that would minimise inventory costs including holding, shortage, and ordering expenses.

• Enhance Customer Satisfaction: Providing customers with products they want quickly with fewer mistakes or out-of-stock, increases customer relationships.

• Improve Forecasting: Referring to historical sales results and inventory can help project sales, growth, and capital needs. These forecasts are essential for budgeting and help with spending for marketing, product development, and staffing.

Investing in a Retail Management Solution

Implementing retail inventory management solutions can help automate your administration and documentation, increase accuracy, enhance customer experience, minimise costs, and provide valuable trends.

One essential solution to manage your inventory is by integrating a point of sale (POS) system with your inventory management system. This will give you data accessibility at your fingertips. A powerful point of sale (POS) system can help track and manage inventory that in turn helps streamline your business process significantly. Small businesses particularly can benefit immensely from the inventory management feature of a point of sale (POS) system.

What is a Point of Sale (POS) System?

Point of sale (POS), also referred to as the point of purchase is the place in a store where transactions take place, for example, the checkout counter. Although recently, the introduction of mobile point of sale (mPOS) systems made it convenient for retailers and employees to checkout customers from any location within their store. To complete the entire purchasing and selling process, a combination of robust hardware tools and software is used, known as a point of sale (POS) system.

The point of sale (POS) hardware components essentially includes a terminal, a monitor, a barcode scanner, a payment processor, a cash drawer , and a receipt printer. All these tools are integrated via the point of sale (POS) software, which is the operating system. Evolved from cash registers, the modern-day point of sale (POS) systems is designed to perform more tasks other than just processing payments, and tracking and managing inventory being one of the essential tasks.

Wondering how a point of sale (POS) system helps with inventory tracking?

While setting up and integrating your point of sale (POS) system, you need to feed in information about your current products and inventory such as product names, descriptions, categories, supply prices, retail prices, SKU numbers, barcode numbers, quantities, and suppliers. Whenever you ring up sales, the software will adjust the inventory levels.

When it comes to inventory tracking and management, barcode scanners are the most crucial hardware component of a point of sale (POS) system that helps track assets accurately, enhance checkout efficiency, manage inventory levels, and enhance overall operations. Barcode systems also minimise manual efforts, saving overall time. The exponential uses of barcodes lead businesses of every size to adapt and implement the barcode system.

So,

What are Barcode Scanners?

A barcode scanner, as the name implies,is an optical scanner designed specifically to scan, read, and decode data from a barcode. When the device transmits the data from the barcode to the connected computer via the output port of the scanner, all the product-related information gets displayed on the monitor. Barcode scanners usually come with a light source, a light sensor, and a lens that translates optical impulses into electrical signals for computers. You can connect modern-day scanners with computers through USB, Bluetooth, and wireless networks.

Types of Barcode Scanners

Depending on the technology used, design, and capabilities, there are 4 types of barcode scanners.

• Pen-type Barcode Scanner: These devices are designed in the shape of a pen, hence the name. The tip of these scanners comes with an LED light and a photodiode. When the barcode is scanned using this type of scanner, LED light gets emitted highlighting the black and white bars of 1D barcodes. The photodiode measures the light reflected which indicates the size of the bars and decodes the barcodes.

• Laser Barcode Scanners: These are an advanced version of pen scanners and are one of the most popular types of barcode scanners. These scanners come with a laser beam directed at a mirror within the scanner. When the mirror reflects the laser rays across the barcode, the light that reflects shows the areas of a barcode that is darkened. This reflection decodes the barcode which sends to a computer or processing unit. Used particularly in retail setups, laser scanners are either mounted on a fixed surface or can be used as handheld barcode scanners . These barcode scanners can scan from about 6-24 inches, whereas long-range laser scanners can scan from 2-8 feet away.

• CCD Barcode Scanners: Charged coupled device (CCD) or ED barcode scanners are comparatively expensive devices. These devices come with hundreds of small LED lights fitted in a single row. The scanners have a sensor fit and the lights are shot directly at the barcode that helps measure the intensity of the light in front of the individual bulb; the voltage generates patterns identical to the barcode. The scans are usually accurate as the barcodes are scanned based on the voltage.

• 2D Barcode Scanners: As the name suggests, 2D barcode scanners are designed to scan and read 2D barcodes, unlike the traditional 1D barcodes that are designed to read horizontally only. These scanners come with hundreds of tiny lights like CCD scanners which are positioned in multiple rows. When the lights are flashed, a digital image of the barcode gets created, sending information to the computer. Irrespective of how these devices are positioned, the 2D barcode scanners can read and decode barcodes that in turn, enhances the barcode scanning speed.

Advantages of Barcode Scanners

• Barcode scanners are easy to use and function just by running the lens across the barcode.

• Since the need to enter details manually gets eliminated, the chance of human error gets minimised.

• Barcode scanners expedite the transaction process. Since there are fewer people required, it saves immense time, effort, and money.

• Wireless barcode scanners can be carried anywhere which is beneficial specifically for maintaining larger products that may be difficult to move.

• You can adjust prices for a certain product during a specific period, you can simply change the settings with your barcode scanner.

Wrapping Up,

Since tracking inventory levels can be challenging, retailers use multiple techniques to monitor inventory levels; the first step is integrating a point of sale (POS) system with an inventory management system. Doing so, the stock reflects every sale or return.

Should you wish to equip your business with advanced tools for inventory management, then owning the right barcode scanner is a must-have solution. POS Sales Australia is a leading one-stop-shop for all point of sale (POS) needs, all available at budget-friendly prices. Starting from  Zebra LS2208  USB to Zebra CS3070 Bluetooth Barcode Scanner 1D or Zebra Scanner Kit Li4278 1D-LI USB and others, you name it, we have it. Browse through our inventory and purchase the right device that meets your budget and business needs perfectly.

For more personalised assistance with your shopping, get in touch with our experts who will help you make an informed decision.