• For Buyers
    • Retail News
    • Products & Suppliers
    • Ecommerce
    • Marketing & Management
    • Trade Show News
  • For Suppliers
    • Supplier News
    • Marketing & Management
    • Importing
    • Manufacturers
    • Warehousing
    • Finance
    • Show Exhibiting
  • Wholesale 101
  • Trade Show Calendar
  • Wholesale Products
  • New Suppliers
Facebook Twitter Instagram
Saturday, March 25
  • Subscribe
  • Submit Content
  • About Us
    • Contact Us
  • Advertise
    • Display Advertising
    • Email Marketing Campaigns
    • Newsletter Advertising
    • Sponsored Content
    • Lead Generation Services
  • Top Product Sources
Facebook Twitter Instagram
WholesaleCentral.com Blog
  • For Buyers
    • Retail News
    • Products & Suppliers
    • Ecommerce
    • Marketing & Management
    • Trade Show News
  • For Suppliers
    • Supplier News
    • Marketing & Management
    • Importing
    • Manufacturers
    • Warehousing
    • Finance
    • Show Exhibiting
  • Wholesale 101
  • Trade Show Calendar
  • Wholesale Products
  • New Suppliers
WholesaleCentral.com Blog
Home»Magazine Archives»Inventory Forecasting
Magazine Archives

Inventory Forecasting

PublisherBy PublisherNovember 1, 20213 Mins Read
Facebook Twitter Email
Share
Facebook Twitter Email
wall of boxes

Is your cash tied up in unsold inventory? If so, the following questions should be addressed:

How did it get there?

What can be done to get it out?

How can you prevent the same thing from happening again?

Clearly you are purchasing more than you are capable of selling. The extra inventory is carried on the books as an asset and added to the net profit, and therefore taxable. The harsh reality, however, is that the store sold a million and spent a million-fifty on inventory and expenses, and is now fifty grand in the red.

Cash is King, Move Excess Inventory

A business in this situation needs to take immediate action. The old saying that, “Cash is King,” couldn’t be truer than it is today. Take these steps to free up cash:

Review Expenses

The first step in the process is to generate cash by reviewing all expenses. Examples might include renegotiating rents and reviewing payroll, typically a retailer’s two most significant expenses.

Reschedule Payments

Secondly, contact vendors to see if payments can be pushed back an extra 30 to 60 days wherever possible.

Review POS reports

Thirdly, using your POS system, run reports showing which vendors and models are not performing up to par, and take action. The action could include returning goods for other merchandise in the future, returning goods for credit, marking slow movers down, or offering spiffs to employees.

With the dollars that will be freed up by these actions, reorder proven hot sellers, especially in key sizes so sales don’t get missed, and look for off-price goods to build traffic and margin.

Solving the Main Problem

In order to keep this scenario from reoccurring, it is important for the merchant to discover what caused the cash crunch in the first place. Fewer customers buying less obviously translates into lower sales volume, but the real problem stems from the store’s approach to sales and inventory forecasting. Your answers to the following questions might uncover some flaws in the planning process:

  • Are sales and stock levels planned at the classification level by store, from the bottom up, or are they planned from the top down beginning at the total company level?
  • Are sales plans retrended at least monthly, and adjusted up or down based on rate of sale?
  • Is there a markdown strategy in place, or are markdowns taken on an “as needed” basis, when slow sellers become apparent or cash is needed?
  • Are slow movers recognized and dealt with in season?
  • Are deliveries actually scheduled based on when goods are needed, or are shipments allowed to come in at the whim of the vendor?
  • Do the shipping instructions read more like ship “as ready, complete whenever”?
  • Are hot sellers identified and reordered in a timely manner? Are open orders reviewed on a regular basis?
  • Are there open-to-buy dollars left in season to take advantage of promotional goods, or do these purchases get placed anyway and you hope for the best?

Perhaps you recognize patterns in the above that describe you from time to time. If this does happen to you, the key is to recognize it, identify the problem, and be proactive about finding a solution.

Ritchie Sayner is Vice President of Business Development for RMSA Retail Solutions.

consumer spending Home Supplier Feature inventory
Share. Facebook Twitter Email
Previous ArticleiDELTA8 Provides Out-of-This-World Relief
Next Article Fast Business Loan Options for Retailers

Related Posts

2023 Retail Success Guide

January 5, 2023

January Retail Industry Insights

January 3, 2023

Supply Chain Volume & Wholesale Prices Dropping Rapidly

December 27, 2022
Sign Up for Buyer Updates
WholesaleCentral.com

Join the Buyer's Network

Get news & updates only for retailers.

Latest Posts

Amazon Return Pallets For Sale: How to Profit

March 20, 2023

2023 Wholesale Apparel Trends

March 14, 2023

Top Wholesale Easter Products

February 27, 2023

The Future of Sustainable Manufacturing is a Hybrid Approach

February 23, 2023

Make Money with Foreign-Trade Zones

February 22, 2023

Overstock Liquidations

January 25, 2023
how-to
Wholesale 101 for Buyers

Amazon Return Pallets For Sale: How to Profit

March 20, 202311 Mins Read

A big trend among some online sellers is buying Amazon return pallets and overstock and…

Product News

Overstock Liquidations

January 25, 20236 Mins Read

Overstock inventory refers to the excess goods or merchandise that a retailer has on hand…

Retail News

5 Essential Tax Season Preparation Tips

January 24, 202310 Mins Read

Are you ready for tax season? April 18 is approaching quickly, and many day-to-day decisions…

Wholesale 101 for Buyers

How to Create a Google Business Profile

January 18, 20236 Mins Read

Looking for new ways to get your brand noticed? Creating a Google Business Profile can…

  • About Us
  • Subscribe
  • Contact Us
  • Advertise
  • Find Wholesale Sources
WholesaleCentral.com

Join the Buyer's Network

Get news & updates only for retailers.

Follow Us:

Copyright © 2023. Sumner Communications, Inc..

Type above and press Enter to search. Press Esc to cancel.