Stock-It-Right!

Stock it Right!™ (SIR for short) automatically analyzes the sales and inventory data in your point of sale (POS) system. Just install it on a computer that can access your POS database, and it produces workbooks that show you how profitable your investments in inventory are, and what you can do to make them even more profitable.

Print out those workbooks, and you have a list of action items you can implement to reduce your inventory budget, while increasing profits!

SIR recognizes that every store is unique. You can’t just apply industry standards to determine the ideal inventory and gross profit levels for your unique merchandise mix. Those general standards may not be feasible or desirable for your store. Therefore, SIR uses your own best performers as the standard. This ensures that its recommendations are attainable (you are achieving them, already, with at least some of the items in your store).

To do that, SIR identifies the “top performers” – the items whose inventory you have managed in a way that makes them the most profitable items in your store. SIR then compares all your other items against those “top performers”. It calculates how much you would need to adjust their stocking levels, reorder sizes, and average margins to match the settings of the top performers. SIR then selects the top few adjustments you need to make that will have the greatest impact on your store’s profitability. That way, you can focus on the changes that will have the greatest impact on the store’s profitability.

It provides you with item-by-item evaluations such as:

• How much you make in a year for every dollar invested in inventory of that item
• How much you could save in reduced inventory, with improved stocking of the item
• The ideal reorder level based on the “weeks supply” you keep for your top performers
• Whether you need to decrease order size in order to reduce the average amount tied up in inventory of the item
• What was the impact of markdowns on the profitability of the item
• Whether you should consider replacing the item, because it can’t be as profitable as your other items

Best of all, it doesn’t just report the information. It provides worksheets that allow you to try out or “explore” alternatives to your current inventory policies for each item. Find out how much cash you can free up, and still enjoy equal or higher sales, and minimal stock-out situations. Play “what if” with:

• Minimum quantity to keep for display and “safety stock”
• Reorder size and cost
• Average markdown and impact on sales
• Target profitability for new items

As you change those values, the worksheet automatically computes how much you will need to invest in inventory, and how much profit you can expect based on those scenarios.

The first time you use Stock It Right!, it will go through over a year’s worth of your POS data to provide you with initial recommendations. Whenever you run it again (we recommend a weekly review), it will review your new data, and make new recommendations. You can keep fine-tuning your inventory policies to maximize your profits, based on the latest developments in your store.