Using PLU and SKU Numbers 

Managing your stock and inventory efficiently is crucial for retail. This is where PLU (price look-up) codes and SKU (stock-keeping unit) numbers come in. Implementing these tools can help streamline your operations, saving you time and money.

What Are PLU and SKU Numbers?

Before we dive into the benefits, let’s define what exactly PLU and SKU numbers are:

PLU codes are universal identifier numbers assigned to products, often produce items and other goods sold loose without barcodes. For example, a PLU code for a Granny Smith apple might be 4152. Suppliers assign these 4-5 digit codes and allow retailers to look at pricing and inventory data for produce.

Retailers can optionally use a range between 3170-3269 to create their own internal PLU codes for produce items. Please do not count on them being available, though. Many suppliers are idiots and will occasionally supply items with these PLUs. Interestingly, this happens in newsagencies despite standard stock file standard requirements explicitly forbidding this practice.

SKU numbers are unique ID codes that retailers assign to track stock-keeping units. They allow you to monitor specific product variants in your inventory. For example, say you assign:

SKU #101 to Coca-Cola Can 375mL

SKU #102 to Coca-Cola Bottle 1L

etc.

These 1-3 digit codes help differentiate product sizes, colours, flavours, etc.

Key Benefits of Using PLU and SKU Numbers

Implementing PLU codes and SKU numbers offers several advantages that can help streamline operations and boost efficiency:

Faster Checkout and Fewer Errors

PLU and SKU numbers speed up the checkout process by allowing cashiers to enter a code instead of searching through the system for the product. This is especially helpful for loose produce items that don’t have barcodes.

Fewer steps mean fewer opportunities for mistakes. Cashiers won’t have to guess which cucumber or apple variety they select. Quickly entering PLU and SKU codes results in faster customer service and shorter checkout lines.

Better Inventory Tracking

When each product variant has its unique SKU number, you gain much tighter control over inventory tracking. Your point-of-sale system can generate detailed reports by SKU showing exactly which items are in stock, which are selling fastest, and which need reordering.

This granular data makes it easier to minimize excess inventory and stock the right amount of each item. No more guessing how many of each t-shirt size or colour to order. The sales velocity by SKU tells you exactly what’s moving.

Increased Efficiency for Purchasing and Receiving

Standardizing your SKU system dramatically improves efficiency when purchasing inventory and receiving deliveries. Purchase orders, delivery paperwork, and item labels must only display the SKU to identify each product variant.

Employees will immediately know which item or size is being ordered or received by glancing at the SKU number, speeding up processing time considerably.

Improved Data and Analytics

With all inventory uniformly tracked and identified by SKU, your sales reports and analytics become much more helpful. POS reports can break down sales and profits by specific product variants rather than just lumping all similar items together.

You can see which SKUs have the highest profit margins, fastest inventory turns, or slowest sales velocity. This allows you to make smarter purchasing and promotion decisions. You can also identify underperforming items that may need to be discounted or discontinued.

Setting it up is very easy.

1: Open Stock Maintenance and look up the item.
2: Click on the "Prices" tab
3: Scroll to the far right on the pricing grid to see the "PLU" field.
4: Click EDIT and enter a number here (for example, 101 for an SKU and 4152 was the PLU for the apple above)
5: Click SAVE

When you are ringing up a sale in the cash register, enter the PLU into the "price entry" box and press ENTER, and our point of sale will find the item immediately!

PLU and SKU Best Practices

To maximize the benefits of using PLU codes and SKU numbers, keep these best practices in mind:

Keep SKU numbers short and straightforward - Long, complicated SKU codes lead to errors when entering the POS and paperwork. Stick to 1-3 digits if at all possible.

Be consistent—Decide on a standardized format for your SKU numbering and stick to it (e.g., category letter + sequence number). Please don’t make it overly complex. For example, we have a client that sells T-shirts and uses SKUs. They start with #1 for the small size of a V-neck T-shirt, SKU #2 for the medium, SKU #3 for the large, etc., to track each inventory item.

The main advantage of SKUs is that retailers can customize them for their needs. For example, they might encode specific attributes into each SKU.

For example, they started SKUs with a "B" for blue products, "R" for red products, or "S" for small, "M" for medium," and "L" for large. This can help employees quickly identify products.

Assign unique codes - Never reuse SKU numbers, even for discontinued items. Your retired products should still show their historical sales data.

Print SKUs on labels - Printing the SKU on product packaging, shelves, or item tags makes it fast and easy for cashiers to enter.

Cross-train staff - Don’t just train cashiers. Ensure everyone, from inventory managers to purchasers, knows how to use and apply SKUs.

Conclusion

As a retailer, implementing PLU codes and SKU numbers requires some initial work but pays off tremendously through savings in time and money. Your business will benefit from faster checkout, tighter inventory control, increased purchasing efficiency, and improved sales data.

Contact our team to learn more about setting up and using PLUs and SKUs in your retail operation. We would happily advise you on the best practices and system options to boost productivity. Investing in these simple tools will streamline your business for years.

FAQ

What is an SKU?

A stock-keeping unit (SKU) is an alphanumeric code created internally by retailers, manufacturers, or businesses to identify and track specific products in their inventor

SKU vs PLU

SKU (Stock Keeping Unit) and PLU (Price Look-Up) are inventory identification systems, but...

SKU (Stock Keeping Unit):

• Alphanumeric code assigned by retailers to track inventory
• Customizable and unique to each retailer
• Used for a wide range of products across various industries
• Provides detailed product information, including size, colour, and variations
• Primarily used for inventory management and sales tracking

PLU (Price Look-Up):

• Numeric code, typically 4-5 digits long
• Standardized across retailers
• Primarily used for fresh produce and bulk items
• Mainly used for pricing and essential identification
• Originated in the grocery industry to expedite the checkout process

Product Number vs SKU Number

Product Number (also known as Item Number or Part Number) and SKU Number have some key differences:

Product Number:

• Assigned by the manufacturer
• More stable and less subject to frequent changes
• Used for broader purposes like manufacturing and distribution
• May follow industry-standard formats
• Provides less granular information about the product

SKU Number:

• Assigned by the retailer
• It is more dynamic and can change over time
• Primarily used for internal inventory tracking and retail management
• Customized according to the retailer's needs
• Offers more detailed product information

PLU vs Barcode

PLU codes and barcodes are both used for product identification, but they differ in several ways

PLU:

• Numeric code, typically 4-5 digits
• Often used for fresh produce and bulk items
• Manually entered at checkout
• Standardized across retailers
• Limited data capacity

Barcode:

• Visual representation of data (usually UPC or EAN)
• Used for a wide range of packaged products
• Scanned at checkout
• It can contain more detailed product information
• Unique to each product and manufacturer

Can two items have the same SKU number?

It is not recommended that you give two items the same SKU number. Each SKU should be unique to avoid confusion during sales and restocking.

However, there are some scenarios where retailers might use the same SKU for closely related items:

1. Different sizes or colours of the same product (using variations)
2. When transitioning between suppliers for the same product
3. For tracking the same product across different locations

The best practice is maintaining unique SKUs for each distinct product to ensure accurate tracking and avoid potential inventory management and sales process errors.

Did you know that boosting your stock turn rate by just 20% could dramatically increase your profits? 

What Are Stock Turns?

Stock turns, or Inventory Turnover, measure how often you replace your inventory over a given period. It is a crucial indicator of your shop's performance.

The Basic Formula:

Manually, it is calculated by

Stock Turn = (Cost of Goods Sold) / (Average Inventory Cost)

Step-by-Step Guide to Calculate Stock Turns Manually

Calculate your Cost of Goods Sold (COGS) for the period.

Determine your Average Inventory Cost
Add your beginning and ending inventory values
Divide by 2

Divide COGS by the Average Inventory Cost

For example:

COGS for the year: $100,000
Start of the year inventory: $25,000
End of financial year inventory: $15,000
Average Inventory: ($25,000 + $15,000) / 2 = $20,000
Stock Turn = $100,000 / $20,000 = 5

The Impact of Stock Turns on Profitability

Cash Flow Management: Higher turns mean you're not investing in the slow-moving stock. This improved cash flow allows you to reinvest in your business.

New stock: Moving your inventory faster keeps your stock current, reducing the risk of obsolescence.

Space Efficiency: You can use your valuable retail space better by keeping fast-moving items on hand.

The Magic Number: 12

Many retailers aim for a stock turn of 12. Why? It's simple:

You're likely paying suppliers monthly
A turn of 12 means you're selling out monthly
This means you do not pay for the stock you sell.

How to Check Your Stock Turns with POS Software

Our POS software has made inventory analysis more manageable than ever. Here's how to check your stock turns:

Open your POS software
Navigate to Main Menu > Cash Register > Register Reports
Expand the 'Stock' section
Select "Show Stock Turn by Dissection and Item"

​Here is the sample I produced showing the stock turns by department.

As a general rule, the higher the score of your stock, the better. This, however, is not always true; a stock turn that is too high often shows that you are understocked. For example, you have an item you could sell once daily, but you order one weekly. So every week, you have sold one, so at the end of the year, you have a score of 50, which is a great score, but you have lost 250 sales that you could have had because you could have sold one a day and all you have sold is one a week.  

High Turns (8+): Great! But are you missing sales due to running out of stock? 

Mid-Range (4-7): Good, but room for improvement.

Low Turns (1-3): Time to reassess. Are prices too high? Quality issues?

Common Pitfalls to Avoid When Optimizing Stock Turns

Over-optimizing: Pushing for extremely high turns can lead to being out of stock.
Ignoring seasonality: Some products naturally have different turn rates at various times of the year.
Neglecting customer service: Don't sacrifice having enough stock to meet customer needs to improve your turns.
Forgetting about lead times: Consider how long it takes to restock when planning your inventory levels.

Our POS systems offer a range of features to help with inventory optimization:

Real-time tracking: Get up-to-the-minute data on your stock levels and turns.
Automated reordering: Set up automatic purchase orders when stock hits a certain level.
Predictive analytics: Use AI-powered (FOCUS) forecasting to predict future stock needs. Our software includes this feature for free.

FAQ: Common Questions About Stock Turns

Q: What's a reasonable stock turn rate? 
A: It varies by industry, but generally, a turn rate of 4-6 is considered good, while 6-12 is excellent.

Q: How often should I calculate my stock turns? 
A: Monthly calculations are ideal for most businesses.

Q: Can stock turns be too high? 
A: High turns may indicate that you're losing sales due to running out of stock.

Q: Should I use the same stock turn goal for all products? 
A: No, different product categories may have different optimal turn rates. Use our POS data to set appropriate goals for each category.

Wrapping Up

Take time to analyse what these scores are telling you. This will help you to identify the actions required to improve profitability and return on investment.

Now, you need to analyse your stock and check each department to see what is working and what is not. A score signals bad sales and that you are more stock than you realistically need at any given time. Maybe you have a pricing or quality issue, but that department has a lot of obsolete stock. If so, move the obsolete stock to a different department, as it will not give you fair figures here.

A high score indicates greater profitability and a good return on investment, although, as I stated, it may also mean that you are not ordering enough.

Remember, every figure has a story.

Most of your suppliers have large numbers of items on the catalogue. Even many small clients of ours would be selling actively over a year, selling over 43,000 lines. Your point of sale (POS) software can quickly give you a list of your inventory management. Smaller retailers sell less than large retailers but sell the same goods. That is a lot of work if you order once a week to handle it. Just calculate how much it costs you now to order stock.

Those who do not computerise it tend to do much of the ordering on gut feel and memory.

However, getting it right is critical to retail business success as we need to get the shoppers what they want and when they want it. This is particularly difficult if you deal with products with high decay, e.g. popular magazines, fresh food, etc., because then we have the problem of availability vs waste.

Inventory management is one of the most critical operations in retail. Ensuring adequate stock levels to meet customer demand takes careful planning and excellent forecasting skills. For most retailers, the replenishment process involves a lot of manual work, guesswork and frustration. But our POS Software offers a better way – retailers can revolutionise inventory management by automating replenishment.

The Challenges of Manual Replenishment

Traditionally, reordering stock is an entirely manual process for retailers. Staff pore over existing stock and review the massive catalogues from various suppliers to select items and quantities to purchase each week. This tedious approach to Retail inventory is problematic for several reasons:

Guessing Order Quantities

Without scientific forecasting, employees guess at order amounts based on intuition and memory. It’s virtually impossible to predict demand across an extensive product range this way accurately.

Time-Consuming

Manually calculating and entering purchase orders can take days of staff time every week. As the business grows, more labour hours get eaten up by this low-value activity.

Risk of Stockouts

Guessing order quantities often leads to stockouts when demand exceeds forecasts. Out-of-stocks result in missed revenue and poor customer experiences.

Excess Inventory

Just as dangerous, overestimating demand frequently causes overstocking. Excess inventory leads to higher carrying costs and waste.

Unbalanced Supply Chain

With no real-time visibility or coordination, discrepancies between inventory levels and supplier ordering accumulate over time. This strains the supply chain.

Imprecise Tracking

Lacking any automated analysis, inventory tracking relies on employees manually monitoring and recording stock counts. This is prone to error over a large catalogue.

Automated Replenishment

It looks at your sales history, forecasts current demand using Demand forecasting, and creates the ideal stock quantity you require now. 

If you order frequently, the amount of stock you need until the next reorder is less. It then compares this figure to the actual stock-on-hand figure you have, adds some safety stock, considers the ordering requirement of each supplier, and prints or issues a stock order with almost no work.

This reduces your holding costs, as you are not holding much stock.

You will save a lot of time, and your shop will undoubtedly do a better job of it.

Our automated inventory management platforms provide a sophisticated solution to these challenges. By using smart forecasting algorithms and inventory sensors, they streamline replenishment to optimise stock levels.

Forecasting

Replenishment systems automatically collect sales data and use machine learning to detect demand patterns for every product. Granular forecasts maximise availability while reducing excess inventory.

Flexible Reordering Strategies

The software allows setting custom reorder points and lot sizes tailored to the demand profiles of each item. Strategies like Min/Max and Just in Time are easily implemented.

Continuous Monitoring

Real-time inventory tracking provides complete visibility across the entire catalogue at all times. The system knows precisely when to trigger reorders to align with demand.

Streamlined Procurement

Purchase orders can be automatically generated and sent to suppliers when stock hits reorder points. This eliminates manual order creation work.

Optimised Delivery Logistics

Our replenishment systems can coordinate with your transport providers to help schedule deliveries.

Enhanced Supply Chain Visibility

Stock sales and holding information provide end-to-end transparency across the supply chain. Any bottlenecks or issues can be rapidly identified and addressed.

Evaluating Replenishment Automation Systems

With many solutions now available, choosing the right replenishment platform is critical. Here are the essential capabilities to look for in assessing systems:

Inventory Monitoring – real-time tracking across all stock items in your warehouse and shop with detailed inventory analytics.

Forecasting Accuracy – advanced AI with machine learning and statistical algorithms to maximise the forecast precision.

Order Optimization – balancing target inventory levels, supply constraints, logistics costs and supplier requirements.

Analytics & Reporting – actionable insights into sales, stock levels, supplier performance, waste reduction and other KPIs.

Customer satisfaction  – By better inventory best practices, you increase customer service.

The right solution will tailor the capabilities to your business’s specific needs and allow custom configurations. 

Our Point of Sale platform provides the most flexibility, scalability and hands-off maintenance.

Realizing the Benefits of Automated Replenishment

Implementing a robust inventory management system unlocks enormous benefits:

Increased Sales

By aligning stock levels with demand and minimizing stockouts, automation enables higher sales and conversions. Customers can find the products they want every time.

Lower Inventory Costs

Carrying excess stock ties up working capital and incurs storage, handling, insurance and spoilage costs. Automating replenishment optimizes inventory investment.

Improved Efficiency

Automation eliminates the hours of manual work traditionally required, allowing staff to focus on more value-added priorities.

Enhanced Forecasting

Automated algorithms crunch enormous amounts of data and detect subtle patterns more accurately than humans. Forecasts improve continuously through learning.

Reduced Waste

Intelligent inventory management avoids overstocking and enables dynamic pricing of perishable goods or expiring products. This cuts waste costs.

Supplier Relations

As a retailer, you are at a disadvantage. Suppliers have far more visibility into true consumer demand and know much more about their product sales in your shop. This allows them to dictate terms around inventory management and delivery schedules to your shop.

Implementing automated replenishment finally gives retailers the data needed to rebalance these partnerships.

With an inventory management system tracking every product in real-time, retailers can gain visibility of their stock that exceeds suppliers' knowledge. You are no longer reliant on the piecemeal date suppliers share.

This allows retailers to optimise orders based on projected demand rather than supplier convenience. Suppliers must become more accommodating to fulfil the order quantities, frequencies and delivery windows specified by the retailer's replenishment algorithms.

Suppliers benefit from retailers sharing their sell-through data. But this is controlled - retailers decide what insights to provide each supplier. This prevents suppliers from misusing the data or acting contrary to the retailer's interests.

Automated replenishment flips the script on the retailer-supplier power dynamic. Retailers can finally dictate the inventory planning relationship rather than relying on supplier practices. This shift rebalances the partnership and benefits the retailer's bottom line.

Start Your Automated Replenishment Journey

If managing inventory still feels like a guessing game rather than a science in your operations, it’s time to explore automated solutions. The technology is more accessible than ever. Replenishment automation unlocks data-driven inventory management, allowing retailers to thrive.

Contact our team today to discuss the best options for your business!

Running out of stock on key products can be devastating for a retail business. For example, a pharmacist told me recently when I came to pick up medicine, "I asked a customer to come back because I didn't have the medication in stock. They came back. Later he came back with a different script and I didn't have that either, so he left and I never saw him again." Clearly, keeping enough stock of core products is critical.

However, this logic does not always apply to non-essential, temporary, or promotional items.

The Risks of Overordering

A while ago I remember Frozen II merchandise was taking off. While it was selling rapidly at first, soon demand dropped significantly. If a retailer had over-orders, they would risk being stuck with surplus stock that would have to be heavily discounted.

"There is a genuine danger that a retailer who over-orders will be left with product that needs to be heavily discounted to get rid of."

When Under-Ordering Makes Sense

In cases like Frozen II goods above, under-ordering may actually be the wiser move. Here are some benefits:

• Avoids surplus stock needing to be sold at a loss
• Creates product scarcity, increasing perceived value
• Gives a chance to explain high demand and offer to order more
• Costs less, so saving you money

Leveraging Point of Sale Software

Whatever your ordering strategy, having the right point of sale and inventory management software is essential. It provides visibility into current stock levels so informed choices can be made on replenishment orders. This helps minimize waste while preserving customer satisfaction.

Streamline your inventory management with a point-of-sale system that seamlessly automates reordering. Our solution empowers you to replenish stock frequently without overburdening your staff. Let us simplify your inventory management process.

Let us show you how our POS software can help you master retail stock management. 

This is part of a proposal I will be releasing for POS Solutions on the benefits of using  Automated Inventory, I hope you like it. 

Keeping on top of inventory levels and movements is one of the biggest challenges retailers face. Manual approaches to tracking stock and purchase orders can be extremely time-consuming and prone to human error. This often leads to lost sales from empty shelves, bloated inventory carrying costs, and unnecessary labour expenses.

Fortunately, POS Solutions provides powerful automated inventory management tools that save retailers time and money.

Real-Time Visibility into Inventory

POS Solutions integrates directly with inventory databases, pulling out real-time stock count data. This gives retailers now their inventory levels across their entire business as stock quantities are updated automatically as items are sold.

Accurate and Automated Purchase Orders 

With an accurate inventory picture, POS Solutions can automatically generate purchase orders as stock levels fall below predetermined or computer-estimated focus AI levels. This prevents out-of-stocks while removing the guesswork from ordering. Orders are precisely matched to demand, avoiding overstocking.

Reduced Out-of-Stocks and Better Customer Service

POS Solutions significantly reduces missed sales opportunities from out-of-stocks by monitoring inventory in real-time and allowing reordering when stock gets low. Customers get reliable access to the products they want.

Optimized Inventory Levels and Carrying Costs

Granular analytics within POS Solutions provide insights into fast versus slow-moving inventory. This allows retailers to optimise stock levels in each location. Excess stock can easily be transferred to meet demand elsewhere in the business. The result is leaner inventories across the board. 

Decreased Labor Costs

Automated inventory management with POS Solutions eliminates employees' need for frequent manual cycle counts and stocktakes. Retailers save on labour while focusing staff on more value-added tasks.

Insights into Shrinkage and Theft 

Unusual inventory activities are flagged by POS Solutions, allowing potential shrinkage and theft issues to be spotted in real time. Problems can be addressed before inventory losses grow.

Streamlined Supplier Relationships

Automated purchase orders and inventory tracking via POS Solutions improve supplier communication and coordination. Deliveries arrive when needed.

The Bottom Line

Automating inventory management via POS Solutions delivers game-changing benefits for retailers, including reduced out-of-stocks, lower carrying costs, optimized inventory, decreased labour spending, and minimised inventory shrinkage.

By implementing POS Solutions stock control, you can manage your stock more efficiently, improve customer service, and boost profitability.

What is ABC analysis, and why should you use it in your shop?

Purpose:

Introduction

Any retail business's success depends on effective inventory management. You could lose money if you don't manage your stocks. You will need more time to meet your customers' requirements if disorganised. While too little inventory can result in lost sales and dissatisfied customers, too much stock will tie up capital and space.

Fantastic, you may say, but the issue is that there is so much stock that manual control is impossible. You can use your POS Software with automatic ordering (with our AI focusing), a standard manual system, or both using the ABC stock control, one of the most popular methods for inventory management.

Note I will discuss ABC here a few times on the blog so that this post can introduce the ideas. I am sure you will be impressed.

The issue

A typical business can sell tens of thousands of different products annually. One cannot control all these items in your head. Although our AI automatic reordering can be beneficial, it lacks the human element, which is a significant drawback. It knows what happens and estimates what will happen, but nothing about what is happening outside your shop.

Let us start doing ABC Stock control

Deadstock

This is a common problem in retail, so first, let us remove the Deadstock. We define Deadstock as any item that has not sold in the past 12 months based on sales. This stock both cost money to the retailers, ties up cash flow, and money and takes up space that should have stock that sells better.

Now in identifying your products that are dead, go to register reports,> stock titled "Old Stock on hand by Date last received"

I tend to do it in two parts. I check the overall problem in the shop to see the scale of the problem. Then I go by the department in detail as its people find it better to examine this way.

What will you do about it once you have identified it? I would suggest moving it because it may be in the wrong area. A good clean, and excellent presentation can do wonders.

If its really not good well mark it as Deadstock to stop others from ordering it, and stop suppliers who know it's dead stock to try to provide it to you underhandedly!

Here is a simple and effective method.

When you receive stock items in the shop that you'd rather not see again, press edit in your POS Software; see image.

Then mark the stock item where the red arrow is.

Our system will no longer automatically order the product from that time. If it comes, when processed, the stock item will be automatically recorded in the instant return file. As a result, you will be forewarned and have the opportunity to act before accepting the dead stock.

Classify ABC

Now list inventory sales using profit or sales numbers from computer reports. In practice, often, there is little difference; some prefer numbers while others profit. You pick.

So go to Register reports > Stock> Top N Stock Sales for a Given Period.

Now using your ad hoc reports, you will get a screen like this. I made a total column.

There are 10,289 stock lines sold in this shop 

This is what a sales analysis of stock lines by total% looks like, and it is not that far off the 80/20 rule. The top 33% of items had about 80% of the shop sales.

Now the top third of your sold by % (33%) are your A's

So we have here 58, A products. Now commonly, people adjust; you do not want the number of A's between 40 and 100 items as manually that is about as many as you can handle.

The B's are between 33% and 66%

We have almost 1600 of these items.

The remaining items are your C's.

Just over 9,000 items, and most of these are very marginal.

Hence we have now done an ABC Stock Control, also known as the "always better control" method.

implementing ABC analysis 

You can keep track of a significant part of their business in your head by concentrating on your A's. You should advertise those products by placing them in prominent locations where enough customers can see them.  A significant increase in sales can be achieved by making minor modifications to your A products layouts. Here with just looking at 58 items, I have done a third of the shop sales.

Now, look into your Deadstock and C's. These products are not moving or moving very slowly. It may not be the product; you may be charging too much.  Regardless of the narrative, you must act on these items. 

Conclusion

An ABC analysis is a method for maximising your inventory. After analysing your inventory and classifying each item, you can start reaping the benefits of using the data to improve results.

FAQ

Q: How long does the process take?
A: It took me here in under 15 minutes.

Q: Can it be done on a department-by-department basis rather than the entire shop?
A: I suggest doing it twice. Once for the store, you can get a global view of your business and once for each department.

This holiday season demonstrates the importance of accurate, real-time inventory management.

Our real-time automatic inventory control in our POS software helped our customers reduce costs by minimizing excess inventory and stock-outs, thereby reducing lost sales and customer dissatisfaction. It also gave them a clear picture of their latest stock levels. This allowed them to order new inventory only when needed, reducing waste and increasing efficiency.

Machines ultimately win compared to manual systems, as too many items exist which is beyond any person's control.

Here is how you can do it quickly if you are not now.

Go to reports > stock > Sold Out or Selling Out Stock Lines

In the Cash register report,

Stock> Sold out or Selling Out Stock Lines

(See the selection highlighted in green above )

Enter last month, put in a sell rate of one (1), enter a quantity of less than two (2) items and see what you get.

If you have any questions or need help implementing effective stock control practices in your business, we would be happy to help. Let us know how we can assist.

Efficient Inventory management means you have the correct amount of stock when needed while ensuring that your funds are not tied up.

And today, you should order with a computer as a partner for your Inventory management. 

Although changing your inventory management might seem like an enormous undertaking, once you get the hang of it, it will not be with your POS System.

I suggest you do it not to start from scratch; it is much easier to work with something there. It saves a lot of time as the more the computer does, the less you have to do.

So if your stock levels are correct, your POS Software knows how much inventory you have instead of second-guessing like people often do. Plus, it uses the automatic focus system to determine the sales fluctuations over time. This allows you to stay ahead of the peaks and troughs to maintain the right inventory balance. This is your advantage as you have an integration with the point-of-sale system and accounting software.

Then once the computer does the initial order, you change and adjust to what you see as your needs. This is much faster to do.

You will find that you can get faster and more accurate ordering with less workload. 

Plus, you will find it all on a single screen, making it faster.

Tip on how to use your POS System to get better inventory control.

I will use greeting cards for this example, but it will work for anything. Using this, one of our clients improved their greeting cards sale by almost 25%, so it works and is quick. What can happen if you have a supplier that supplies you with many lines of stock, it can be hard to know what lines are working for you. If there are a lot, some I can guarantee you are bombs.

So go to Cash register reports> Suppliers> Supplier Sales Trend for 12-Month Period.

Let's keep it simple, so select a date, say last financial year and a supplier.

Now up pops a report that looks like this.

Now on the report, look at the right column, and you will see I highlighted in green stock lines that have sold nothing for 12 months. In blue, you can see that you have stock. What do you have stock of them for if they are not selling?

Investigate!

Consider being aggressive. Set a minimum sale budget, say 1 or 2. Now, if you look at the list, you will find more stock lines to look at too.

It will take a minute to check them out, so start now!

The big problem is that after the lockdown many shops have restocked, so their new inventory is new.  So a common problem many have is amplified as they have old stock sitting for a long time without selling. Old stock is more challenging to move than new stock, so the odds are that this stock will continue sitting in your shop if you do not do something.

The first point is to identify this stock. Luckily you have an extensive system in your POS Software to help you find this old stock. 

Click here for a training video on how to identify such stock.

As a tip, it's best to run it into three-month, six-month and 12-month-old periods separately as each period has a story to tell. 

Staying on top of your stock is critical to loss prevention. Hopefully, you have finalised your stocktake so we can calculate your retail shrinkage.

So why not do so now?

This is how you do it in less than four (4) minutes.

1) We need what your computer had for the value of your stock before the stocktake. If your point of sale is up to date, print out a report of your stock valuation before starting the stocktake. If you do not trust the figure in your point of sale software, then you can, or your accountant can give you an estimate. This is the (Perpetual stock value).

2) This comes from your stocktake and is the value of the stock you had after the stocktake. Your point of sale software will have this figure once you enter the stocktake figure in the stock valuation report. (Physically Counted Inventory Value)

3) What are the total sales of your shop less the non-stock items? E.g. if you sell touch gift cards, these are not stock items, so take them off your overall sales figure. Your total report should be able to give you this figure which is your (Sales of stock products)

4) Value of the damaged goods you counted. (Damaged stock value)

Now please do the following calculation.

Shrinkage% = ((Perpetual stock value)-(Physically Counted Inventory Value))/(Sales of stock product) x 100%

A familiar figure here is about 1.4%, but it varies generally between 0.1% and 6%.

Now what you may also want to look at is your damaged goods, these have a different story, and they can be a compelling story to tell too.

Damaged% = (Damaged stock value)/(Sales of stock product) x 100%

Once you get these figures, you will know how bad a problem you face. Now we know what we are looking at in my next post on this subject, I will discuss how to analyse further. To see how we can reduce this problem. It's a tradeoff as your loss prevention strategy must reduce loss without impacting the customer shopping experience.

Controlling stock control and doing orders, the reality is that the computer will win.

There is no way a person can keep in tune with their shop's twists and turns. There are too many stock items to keep track of in the shop. Here is a better and cheaper way.

The best way to do it is with predictive analytics (focus). These tools are generally too expensive for small to medium-size retailers unless they have our point-of-sale system. This is because we have embedded it into our software and give it out free. To use it is both intuitive and straightforward. It does not need much training either to use. Once working it produces less work than manual stock ordering.

Let's say you have a basket for tape. You cannot order limitless quantities of tapes. So what our users can do is use the option, focus order. It is an advanced type of "just in time" method of stock control, which gives you a plan of how much stock you should have now.

The computer tracks the stock on hand and estimates the stock level required for these goods in the period (focus). If it thinks that the stock on hand is too low, it can send an order to a supplier with the speed and accuracy that no one can match.

It is easy to set up and use.

You can control your stock with relative ease.

For details on how to do this, please, click here

Now most of us are sitting on a heap of old (dead) stock. It tends to be pretty bad this time of year because we have a lot of short holidays with specific themes. These require stock that are specific to the event. This stock if unsold will sit uselessly on the shelf, tying up cash unless you do something.

We have in our POS Software an extensive system to help you identify this old stock.

Click here for a training video on the identification of such stock.

As a tip, it's best to work with each department separately.

Many of you are now getting updated price lists. Every day someone is telling me that they are suffering from the scarcity of some goods. No shortage of reasons, I have noticed for the holdups.

It’s affected manufacturers and suppliers of Australian goods spanning electronic devices, smart home technology, medical devices, and manufacturing equipment. Distributors, installers, repairers, and others have all suffered from the flow-on effect of the shortages. Potentially, producers in these industries will also be hit:

Go into your in your POS.Software and you will find it is easy to do.

If you go into stock pricing (see the red arrow), you will find a bulk price on the menu item.

As suppliers now, they tend to use sections rather than update all their prices. You will need to select from a wide range of filters.

I find it very useful to use the partial stock name to specify only items with part of the name in the title. For example, only items with *pens* in the description.

Now select what you are going to update. In this case, it's retail price. But you can also change wholesale costs, business costs, website prices, or whatever. There is a lot of flexibility there.

Then select how your price will be updated by markup, by a percentage increase, or by an absolute number. You can set them all to be the same price, etc.

You can save a lot of time here.

Stock that doesn't sell is alluded to as dead stock. This stock takes up space in the shop and storeroom, where it is often neglected. It usually costs money to get rid of it. The best solution is not to get it in the first place.

This is not easy. The truth is that no one wants this dead stock. Everyone is trying to get rid of it, and if you are not careful, your suppliers will often try to get rid of it by shipping it to you.

Here we will discuss how your POS software can help you to stop getting more of this stock.

In your point of sale, software go to the stock maintenance and/or stock received.

Now edit the item. See the image below.

See where the red arrow is pointing. Mark it here as discontinued.

From now on, it will show it as NOT WANTED. If it does come into the shop by some chance, our point of sale software will put it on a list to be instantly returned.

Now is your last chance to review your merchandise before the holidays, as running out of stock now can have a dramatic impact on your business. Most usually recommend buying small items and ordering many times but not now unless you have some terrific deal. Most now recommend if you can get grab it.

Here is a unique report that is fast to run and checks the stock levels of what you have that is selling.

In the Cash register report,

Stock> Sold out or Selling Out Stock Lines

(See the selection highlighted in green above )

Enter last month, put in a sell rate of one (1), enter a quantity of less than two (2) items and see what you get.

Another example of how our POS Software gives you the information you need!

This is happening because we have so many integrations with suppliers. Our clients are now are often simply importing in the suppliers' files, great. 

But what is happening is that suppliers, when faced with 

-A product name that is too large for their systems
 -Products so like too many of their other products 
- Laziness

summarise the description. 

Look at the above real example. What does TAS mean? Looking at the book, our client could not find anything that made sense. We think it might be the supplier code "Trade At Settlement" since it is used by several items in their catalogue and the only thing common is made in Canadian. So it is was used to mark a product whose price is to be decided when payment is due because of currency fluctuations. For example, if you buy in Canadian dollars, you will not know the cost till the date of settlement. 

Now, what happens when your staff are looking for the item in your system and see the TAS? How does it help them?

If they cannot find it, they cannot sell it?

If you encounter this problem in your system, you need to change the description to something more meaningful.

A quick way of checking the most commonly handled products in your shop is to go to Register reports.

Now pick "Top N Stock Sales for a Given Period."

Now in the form put in the two months and ask in order of quantity and see what you get. If you cannot recognize some of the descriptions how can your staff?

Now it is up to you to do something!

Today, we are struggling to cope with the impact of pandemics on our supply chain. It has become more than a severe inconvenience that is affecting profitability.

On top of the supply problems, many suppliers struggling with shortages are quietly increasing prices and substituting old formerly unsellable stock. So prices are going up everywhere except in official Treasury figures.

What happened to us lately is interesting. We ordered two items for around $ 18 unit price and with a shipping cost of $15. But what happened was we were charged the two shipping costs of $30 in one parcel. They never did that before.

You must be cautious otherwise, you will not notice the price increase or replacement.

Older legacy systems with inadequate stock tools cannot do this. Here's a valuable screen if you need to check

Stock maintenance> History tab> Price change

What it does is provide a product history for each barcode and price change over time.

It is worth studying as this screen will be invaluable for you over the next few months until we get over this supply crisis.

Many suppliers are starting to issue new price lists. It can be a lot of work to see if your inventory matches the latest price list.

So this is a simple way to do this:

Go to the report

Click Quantity on Hand and Price Check.

Exclude items that are out of stock in this exercise. If you do not have accurate inventory control, you should use the following rule, inventory activity from the selected date.

Then select the appropriate supplier.

You will see a report with items, costs, available quantities, and sales prices. Match it off.

Another example of how our POS Software saves you time.

This is a step by step discussion on how to investigate your stock for dead and slow-moving stock lines.

What often happens

If a department has many inventory rules, it is expected that 20% will be flagship products, 60% on average, and the rest slow to dead. Without action, 20% ​​of the flagship products get sold. These are often replaced by average products. Soon the department has fewer sellable products. The inventory fills with unsellable products. They take up the space, take up your capital, and, more do not attract customers.

Inventory Planning

This is where inventory planning comes in because you need the products that sell.

Now let's work on the greeting card. This is because there are so many products that cannot be controlled by gut and feel. As a result, consultants can demand thousands of dollars to do what your POS System can do for free using this method.

By the way, this is an actual example of what we did in a client's store.

We decided a baseline for a slow inventory line was one sale every four months. I agree if you think this is too low, but it was the initial decision because the problem was much bigger than expected.

So, go to Reports> Stock> Slow Stocklines. See above.

I would suggest as a first rule use two years, to give you a long-term perspective. So we put in less than six sales, and we had stock. 

We got a 16-page report which you will find interesting.

As you can see in the green, the total value of these items in stock at this store was almost $ 20,000. That $20,000 is useless for the business.

Let's take a look at the details.

See the red arrows. One item had one sale in two years. Twenty-four are still on the shelves now. The total value tied up here is $43.20. How long do you think it will take to sell these items at this rate? After two years, is it still marketable? Worth investigating, I think.

This is an example of how such inventory analysis can provide information to improve decision making. It can help reduce costs and improve sales.

Try it.