Surely on your deposits has been a certain amount of goods for the “hard sell” that is why it is known as obsolescence of inventories Do you want to avoid it? Here we tell you how!
Every retailer wants to find the perfect formula to keep your goods stay for too long stored, as most convenient for the business would be quickly sell the most products possible, accelerating the inventory rotation.
However, it is not always so and in a greater or lesser extent, it runs the risk of falling in the obsolescence of inventoriesfortunately there are several strategies to implement through which it is possible to avoid it, in this post unique Analytic Retail we will offer you the answers that you need to know.
What is an inventory obsolete?
It is called inventory obsolete that goods of a company of retail that remains stored for a long time after it should have been sold, which represents a loss for the store, because with the passage of time this is going diminishing their commercial value.
The majority of retailers determines that your inventory is obsolete once there are no sales after a set period of time. It is considered as a warning signal that you have not been following the best practices administration inventory. How to avoid it?
1. Forecast of the demand
One of the main causes of the inventory obsoleteare the errors encountered in the accurate forecast of demand, in fact, some retailers believe that is the most important factor.
A good recommendation to avoid forecasts erroneous, is to pay attention to the sales trends of the last few years. Mainly it is advised to buy products that already have a proven track record of sales consistent.
In addition, you should pay attention to what your competitors are selling and evaluate just how good are the results of their sales.
2. Inventory rotation
Another good way to avoid the obsolescence of inventories is the estimate of the time needed to place new orders for the inventory of the store. This is achieved through the use of a formula is simple but effective.
(Average unit sales per day x Average delivery time in days + safety Stock = reorder Point
This formula will also help you to better understand which is the rate of rotation of inventory and will give you information as to how to increase it.
3. Analyze inventory levels
It is always desirable to obtain detailed information on the levels of inventory of your shop, with the purpose of detecting if sales go as planned, and otherwise take steps at the time.
To help you in this task, you must make use of technology, specifically through a system of administration based on the cloud, that allows you to know in real time how much inventory you have.
Knowing the information of your inventory, it is possible to know if these charging an excess of stock, determine if you require to increase your sales efforts, or if on the contrary these to point a break in your stock and you need to sort ordering again.
4. How do I correct it?
You can try to perform large discounts to your customers or even to organize flash saleswith the purpose to attract the hunters of discounts.
However, you can reach out to get you with products that simply will not be sold, and it is there where you should opt for selling them to other retailers specializing in outlets or clearance storesthat will represent an economic loss for your store, will allow you to recover some of the money and open up space for new merchandise.
Conclusion
The inventory is obsolete is the least desired in a store, only comparable with do not have inventory to sell. Since in addition to not generate income, it will increase your costs of inventory and will take up space very valuable that you can reuse with new merchandise.
If you have already made the mistake of buying merchandise that has fallen into the category of obsolescence of inventoryas we have explained some of the measures to implement to fix it, however, it is best to carry a thorough evaluation that will allow you to avoid mistakes in decision making.
