Most of you would have heard of the 20/80 rule which states that 80% of all rewards is done by 20% of the work. This formula seems to come up repeatedly in just about everything, for example, a person who works in a council told me recently that about 20% of the people make about 80% of the complaint.
What is not often realised is it's heavily weighted on the top so that it is quite common that about half a percentage makes about 30% so much that in retail often, your top 40 stock items make up about 25% of your shop sales?
So when you start thinking about stock, it is important to identify these items. These are your *A* stock. It will not take long if these are not managed properly for you to lose a big bite in profitability and long-term sustainability of your shop.
It is easy enough to find these items in your point of sale system.
Go to the main menu
Register reports > Stock
Top N Stock Sales for a given period.
Put in the last twelve months, select 40 items, order by number or profit depending on your view and out will come a report similar to above. These *A* items should be monitored continiously.
By having solid stock management practices with our tools, you can be sure your business is supported.
