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Managing Retail Inventory and Maximizing Return on Inventory Investment

Have you ever heard a retailer, wholesaler or distributor say, "We can't sell it if we don't have it? "How about, "We're committed to inventory?" Or perhaps, "We're not going to just give it away?"

It's not really surprising, in fact, that each comment seems to be followed over time by the next. There seems to be a direct connection from the idea that you must have inventory in stock in order to sell it, to the pledge of being committed to having (lots of) it in stock, to the assertion that the excess, leftover, dead stock retains its value and cannot be sold for below cost.

In fact, there is a direct connection in this line of thinking, and it is characterized by one misconception followed inevitably by another. Let's take a look at these (and other, related) misconceptions. You may check http://www.brandboom.com/ online and ask question about the inventory and get the solution for every question.

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"Our inventory is our most important asset."

Inventory may be the largest asset on your balance sheet, which makes it very important, but it's not the most important asset. Your most important asset is the customer relationships which enable you to turn that inventory into cash, day after day, day in and day out.

Inventory is one of those things where more is not necessarily better. When it comes to inventory, "more" generally leads directly to "too much", which is usually the first step on the road to trouble.

Ask yourself this; "If I could figure out a way to do the same sales volume with less inventory, would I?" You bet. Inventory is, in fact, an unfortunate necessity of doing business for a retailer, wholesaler or distributor.