If you are a small business owner with retail stock, you’re probably more than familiar with the never-ending task of managing inventory. Successfully keeping track of what you buy and sell is one of the most important duties you have, and can make the difference between a profitable business and closing up shop. If you end up holding on to too much inventory, stock could go bad (if they are items with expiration dates), you could literally run out of storage room or you might find you have too much liquid capital tied up. End up with too little inventory on hand and you can miss out on business. There are many different ways to keep track of all of those goods, and you’ll have to find the one that works best for you. Here are some options to help you make a decision.
If you have very few employees or are a business of one, chances are you will keep track of inventory using a stock book. Also known as a log book, this is a simple, manual way to track what comes in and goes out. You’ll have one column set up to list all the different items in stock, and another set up tracking sales. You can also use a spreadsheet or database program on your computer the same way. Just remember that this method will wholly rely on consistent effort, and if you get sloppy you could be in trouble. There is also no way to create a forecast or analyze data with this method.
Take a step up and keep track of inventory using bar codes. This is one of the most common systems used, where a UPC, or Universal Product Code is given to each item on a label that can be scanned. You can use a bar code reader that fits in a pocket, a larger device for a warehouse, or a scanner at a cash register in a commercial store. When something is scanned you’ll see a full analysis of every item like that in your inventory. That means each time something is sold you’ll know immediately how many you have left. It’s a great sales tracker, but again doesn’t have any sort of pattern analysis ability.
Radio tags, formerly known as RFID or radio frequency identification tags are the most common system employed by retail stores. Each item of inventory gets its own plastic tag that actually includes a microchip and antenna combination. That microchip can be programmed with as much information as you could possibly think up, and a RFID reader will give you all of that data when you scan the inventory item. This is a more costly approach to inventory tracking than simple bar codes, but will allow you to read the tags from a remote location, to receive data from a group of products instead of only one at a time, and to updated inventory while still in transit. RFID tags can also be used for theft deterrent, triggering an alarm if an item happens to get up and walk away when no one on staff is looking.
If you run a large store, such as a supermarket, you might want to use the Kanban approach to inventory. This is a Japanese term that means “sign”. Basically, when the last item of inventory is removed from a shelf or display grouping, a card at the back of the shelf is uncovered. That card will have information for the staff as to where replacement inventory can be found in the warehouse or storeroom. The card can also be embedded with reorder information, so whoever notices it can quickly call out for additional stock. It isn’t any more expensive than barcode printing, but won’t give you any analytical information. Kanban will be the best approach if your inventory is used pretty evenly across the store and revenue is the only number you really care about.