Most retail businesses use a point-of-sale system to process customer purchases. But you can also use a POS system to manage your inventory effectively and, in doing so, increase both your revenue and the efficiency of your operation.
Here are five ways to use your POS system to manage your inventory:
1. Determine which items are not selling. Inventory that sits in your warehouse costs you money in terms of space and capital. By using your POS system to pinpoint which items are not selling well, you can take appropriate action to increase sales (such as reducing prices or stepping up your marketing efforts). If the items continue to sell poorly, you can eliminate them from your lineup.
2. Forecast future sales based on prior sales. A year can seem like a lifetime in a small business, and many owners find it challenging to recall sales trends. Before placing orders, use your POS system to review your sales data from the same period last year to help you determine the products and quantity you need. Be sure to factor in any recent changes, such as an increase in customer volume or shifting demographics.
3. Set up reminders for restocking. A customer who comes in looking for an item only to find it out of stock will likely leave your store unhappy. Instead of working to figure out which products are running low, you may be able to set up your POS system to send you a notice — or even reorder automatically — when inventory drops below a given threshold. This will help to keep your shelves full and your customers content.
4. Manage inventory across multiple locations. If a customer seeks a specific product or size that’s sold out, you can quickly look up the SKU to see whether one of your other stores has the item in stock. This makes your business appear organized to your customer and helps to ensure that your company makes the sale (instead of sending the customer to a competitor).
5. Capitalize on purchasing trends. Instead of focusing on sales of individual items, use your POS system to look at overall trends. Are certain types of products flying off the shelves while other items sit in your store for months? Study this information to determine which areas of your business to expand and which types of items may not be a good fit.