Inventory Management is a Vital Part of Retail Business Laws
Retail is the exchange of consumer products or services for retail sale to consumers through multiple outlets of distribution to make a profit. Retailers meet consumer demand identified by a supply network. The demand may come from a manufacturer, wholesaler or retailer, who agrees to sell a specific quantity at a fixed price that includes their markup. Retail is typically a physical location with sales personnel that displays the products for sale.
A business owner interested in opening a new retail business has a number of choices. Retail locations can be opened in existing retail locations, planned from the start or located in a shopping center. The type of store, location and combination of products and services required will depend on the type of retail business chosen. A business owner seeking increased profits must establish a solid understanding of retail business concepts including inventory control, planning marketing strategies and customer service. The store manager should have prior retail experience, customer service skills and be able to identify complementary items to increase store sales.
Inventory control involves analyzing the inventory to determine current and long-term requirements. This involves categorizing merchandise based on geography, seasonality, or end-of-season discounts. Strategic planning determines how much inventory to carry and where to locate it to optimize floor space. Planning is critical for new retailers as they seek to minimize rent, labor and operating costs. A key factor in inventory control is to determine whether to use a warehouse or a retail store for back-room inventory or whether visual merchandising is more efficient than traditional bar or restaurant inventory.
Retailers also must have a comprehensive system to track sales, including bar code scanning and RFID tagging. This is another tool to boost inventory management. Some retail stores offer both bar code scanning and RFID tagging but most must rely on only bar code scanning because of the potential cost and benefits associated with RFID technology. Bar code scanning is a great way to track sales but is often difficult to implement in a retail store with limited floor space and other constraints.
The last component is employer identification number (EIN). This is an individual, usually the store owner or manager, who provides employee identification number(s) to the employer, which is then entered into a system for recording payroll. The EIN must be documented on a monthly basis for all employees and it can sometimes be lost or misplaced. This is another part of retail business laws that stores need to follow.
Retail software and POS systems can help your retail business by streamlining the inventory management process. Point of sale systems can also help increase profitability by eliminating the human resource aspect of keeping up with the inventory and tracking sales. Both these tools can be very effective for retail businesses but you need to ensure that you get the right POS and software that suits your retail business needs. POS software is usually easier to use than an inventory management program and it can integrate with your sales and employee handbooks to give you a comprehensive view of what is going on at all times. It is up to you to make the decision on which system would be best for your retail business needs.