Selling Successfully (Your One-Stop Resource for Setting Up, Managing and Marketing)
Tips For Excellent Inventory ManagementGood inventory management is crucial for efficiently running a retail business. Maintaining command over inventory helps keep stress to a minimum, especially when it comes time to figure business income taxes. But, other than making accounting a bit more streamlined, keeping saleable goods well organized can also help to increase the 'fun' factor of running a Ruby Lane shop, since the shop owner is in control of their stock, and not the other way around.
Another important service granted by an organized inventory is that careful management will greatly reduce the chance a customer will be turned away, disappointed. More often than might be thought, and certainly more often than it should happen, customers are told that despite the fact that they've placed a purchase order and committed to buy, the shop owner isn't able to deliver the goods because the item cannot be found.
Poor record keeping can fail to alert a dealer to the fact that an item showcased in their shop is actually no longer residing in inventory because it had already sold the previous year. Poor storage habits can mean that an item will remain hidden, lost in inventory, until long after the once willing buyer who sought to buy it has also disappeared. Keep in mind that if you think you own something, but cannot find it or, alternatively, if you aren't aware that you still possess an item and so don't bother to list it, in either case that piece of inventory is of no immediate value to you.
There are three major elements to effective inventory control:
- Manipulation of the items themselves from one location to another in the physical world. This requires some amount of personal 'hands-on' effort and necessitates providing adequate physical storage space, as well.
- Rotating stock into and out of inventory in your Ruby Lane shop. This means becoming reasonably familiar with the sales, storage and inventory management features that the site provides.
- Entering and removing merchandise on a regular schedule in a record 'book', either paper or electronic, is the third element. A combination of both hand written and computerized record keeping can often be the most useful.
For many people it is physical storage that is the most difficult to efficiently manage. Once their home is completely overrun by storage boxes, shipping paraphernalia and the associated clutter of their stock in trade, disorganized collectors/dealers/artists may find themselves dreaming of moving to slightly larger accommodations some day. The Hearst Castle, perhaps, or the Astro-Dome. But, more room isn't always a practical option and even if it was, surprisingly enough it wouldn't eliminate the problem forever. Given additional space, disorganization has the curious ability to effervesce, joyful at the new expanse that has been made available. No matter the increased size of the area into which they are moved, possessions lacking control will soon expand, striving to once more fill every void.
The thing that changes shop stock into this kind of compulsive clutter is the reality that it is homeless. Like a person or a pet, without any special place to call home, an item of inventory can end up anywhere, or nowhere in particular. Don't let good merchandise go feral and aimlessly wander about. Instead, supply a specific area for it to settle in, where it can be content and comfortable with others of its own kind.
How you decide to store your physical inventory really depends on several factors. These factors will include such things as the size and location of the storage space available, type of inventory, and personal physical limitations. If you are not a physically strong person, for instance, it would be foolish to store items 200 pounds at a time in huge boxes that you cannot move without assistance. Small items like jewelry pieces, likewise, are usually easier to keep track of if stored in containers that offer small, individualized compartments, rather than being packed randomly into large boxes.
Stacking map cases work well for jewelry, as do specialty storage kits manufactured as 'parts' keepers for holding nuts and screws (most hardware stores offer an assortment of this type of unit), and even a sewing case or tackle box can serve the purpose well. Padding for compartments can be made from 'no-skid' cushioned shelf liner, cut to size. For flat, compact merchandise such as recipe booklets or clothing patterns a regular filing cabinet and a filing system by manufacturer, age or whatever is perfect. Bookcases, and other regular pieces of furniture can function as storage areas, but if you have children or pets that might have access to items in open storage, you might want to consider moving things to a more secure location.
When storing items, keep its properties and needs in mind. Remember that glassware and pottery should not be stored in areas subject to extreme, sudden changes in temperature. Likewise, paper goods have no business being stored in the basement unless you are willing to take Herculean measures to keep that damp space dehumidified. Artwork should not be hung on a wall that receives direct sunlight or placed where it will be exposed to florescent lighting. Use common sense when placing items into storage the same as you would when choosing into which bank you would place your money. Inventory is, after all, simply unconverted cash.
Managing to move everything out from under foot and out of sight, of course, won't automatically mean that all will then be well. If six months from the day you store something you haven't got a clue where it is anymore, you aren't going to be much better off than before. Being compelled to shift multiple boxes of stock and eventually sort through everything you own in a frantic attempt to put your hand on an item that someone has just ordered and wants to buy can be incredibly frustrating. If it can't be found at all, despite the desperate search, the customer will be disappointed. Possibly angry. The only thing that can prevent such a scenario is to sort out any disarray ahead of time, before it can occur. What is needed is an organizational plan. Without one, your business (and possibly your sanity) can be adversely affected.
Make inventory as easy as possible to maneuver, then, and if it is to be stored out of sight, this should be done in a managed fashion so that you don't have to spend an entire afternoon unwrapping and re-wrapping other stock in order to locate a single desired piece. Your time has precious value, too.
The second element of inventory control concerns moving stock into and out of your Ruby Lane shop. While this may seem easily enough accomplished, there are certain aspects about the process to keep in mind. You could take a cue from your hometown retailers, for instance, and realize that waiting too long to place seasonal stock out on the floor may result in it remaining behind when the season is over. This can be especially true online as it may take some weeks for search engines from outside Ruby Lane to find and index a listed item.
A good rule of thumb would be to try to place seasonal goods, Christmas collectibles are an example, into your shop no less than a month in advance of when you would expect more people might be seeking to buy such items. Most collectors of such seasonal goods, of course, will be looking for them year round so you don't actually need to feel obligated to list such things only according to the calendar. But it is at the approach of certain holidays that other customers besides the dedicated collectors will also find such things to be of interest. Knowing when to be sure to offer a specialty item, then, can be every bit as important as knowing who made it or what its value might be. If you store items related to a particular holiday together in the same area or container it will help to streamline the process of getting those items listed when the time is right.
Ruby Lane supplies shop owners with features to assist in keeping track of and easily manipulating online inventory in a variety of helpful ways, including a back room area where items can be placed out of sight, but not out of inventory. The back room is a place where customers cannot see your item and stock can no longer be accessed for immediate purchase. This can be useful for storing things you may want to rotate on a schedule, to facilitate a fresh look to your shop. It's also useful for 'storing' items that you may have agreed to hold for a customer, as in a Layaway arrangement, or for a variety of other reasons.
The Shop Inventory Report and the itemized Yearly Summary that shows sales and expense totals are other helpful inventory management features in a Ruby Lane shop. They can each be printed or incorporated into permanent records in your own personal computer programs. In addition, another shop feature, the Wish List, can be used to help determine if there is a type of item for which customers are searching. You may have just such an item in physical inventory, but have not yet listed it for sale in your shop. Click on Wish Lists on the left, inside your shop, and then click on any of the numbers shown in the columns. This tool can show you specific search terms that have been used inside your shop, for individual Lane searches or for all of Ruby Lane. These are just some of the tools we provide that you can use to help manage inventory once you have placed it into your Ruby Lane shop.
Keeping adequate records, is the third element of effective inventory control. Records should not be viewed as being just a good idea or an option, they are actually imperative. Proper record keeping identifies income, helping to manage your money, too, not just items in inventory. For shop owners located in the United States these kinds of records are of particular importance at the end of each taxable year. When it comes to figuring profit, the amount that was initially paid for an item is just as important as the amount for which it was sold.
Proper record keeping actually should start when an item has been acquired and it is physically added to inventory. Regardless of the sort of individual storage unit you use to store items, a method should be put in place that names each location and/or sequentially numbers boxes, plastic tubs, or other such storage containers. If they are numerous, these last should be numbered in such a way that the number can be easily viewed from all sides. In the case of plastic containers or boxes an indelible marker can be used to print the number on the sides and lid. If you use more than one filing cabinet or bookcase they should be assigned numbers as well, although obviously you might not want to actually apply this number to them in a permanent way.
Each new item should initially be assessed for damage, then photographed and assigned a unique inventory number, which can be attached in a non-damaging way to the item itself or secured to it's protective wrapping. It can then be placed in, say, box number "3" for storage. The exact location of the item should then be immediately written into the appropriate space on a 'Master List,' next to other pertinent information such as the inventory number. A 'master list' is a sort of logbook that can receive penciled entries in a continuous fashion. Such a list can be kept on something as simple as a plain, ruled tablet, or information can be entered into printed spreadsheet pages that you have composed on your computer, printed and then clipped to a clipboard.
Other specific item information on your master list might include when and where you obtained the item, and how much it cost. If you use an electronic inventory control system, such as Collector Pro or CATS, utilizing a simple physical system like the master list can still be a good idea because, if used correctly, all information is of a more immediate nature and instantly accessible. It also doesn't hurt to consider the master list to be an acceptable hardcopy 'back-up' should you lose access to all electronic inventory records, due to some unfortunate future event.
You can easily get into the habit of quickly transferring item information from written notations on the list to your computer inventory program on a regular schedule. When you do this, also be sure to add any further necessary information such as your photographs and whether or not there are additions to the item's cost, like repairs, framing or dry cleaning. Then, make a check mark on the list next to those items which have been duly entered in the computer program.
If you have the necessary available memory in your computer, using an electronic method for keeping 'books' on your inventory is a very good idea and definitely worth the expense. Electronic inventory programs can usually assist you not only in locating items easily and quickly, but can also help to keep you informed if certain details are collated into spreadsheets. What types of merchandise seem to sell quickly, what type of item hasn't been selling at all? You normally wouldn't want to continue investing revenue in more of the same type of inventory if it has been moving slowly, unless you want to 'collect' it yourself.
Knowing what people are looking for, at what price point it generally sells, or even at what particular times of the year, puts intelligence to work on improving your bottom line. "Give them what they want." is not just true in Hollywood. Besides an uncluttered house, you can gain knowledge from a well managed inventory program and then take such knowledge with you whenever you go to buy. In this way the things you bring home in the future with the intent of selling for a profit are less likely to stay encamped in storage boxes with additional idle goods, playing endless games of pinochle while they wait to be sold.
If you can think of no other good reason to keep record books and otherwise manage your inventory in a businesslike way, consider how important it could be to your family in the case of a catastrophic event. You may know what every item you own originally cost and what it is worth today - would they? Keep your family in mind when considering the state of your inventory management. If you haven't got a clue where something came from, what you paid for it, where it went, what it is worth or why it might be valuable....it's a pretty safe bet that those who inherit the goods from you won't know either.
"Organized" is not a state of being, it is a perpetual activity. It should become habit. If you haven't already set up procedures for managing physical inventory, both incoming and outgoing, then you need to do it sooner rather than later. Disorganization feeds on itself.
If the leaning stacks of boxes in your basement faintly resemble Stonehenge, you may already have a serious inventory control problem. You could perhaps hire Indiana Jones to enter the "Temple of Doom" (your garage) to unearth that holy, hidden widget for which you've been endlessly searching. But be advised that there are many such cluttered inventory storage areas in the world and he just might be incredibly busy. Do seriously consider making an effort to organize your stock of goods yourself. Otherwise, take a number.
http://www.irs.gov/pub/irs-pdf/p334.pdf (requires Adobe Acrobat Reader - Publication to guide Small Business owners)