Article Content-
- Introduction
- What is inventory management?
- Types of inventory management
- How does inventory management work?
- What is SKU?
- Why is inventory management important?
- What is an inventory management system for bookstores?
- Conclusion
Introduction
For any retailer, the most strenuous task of running a successful operation is maintaining an effective inventory management. Bookstores are no exception to this. You have a limited amount of space but a whole lot of books to choose from when analyzing how to stock your retail space. Getting the most of your inventory space is crucial for bookstore owners. Once you have your book store inventory under your control, everything else easily falls into place.
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What is inventory management?
Inventory management in a business means to manage order processing, manufacturing, storage and trading raw materials and finished goods. It makes sure that the right type of goods reach the right place in the right quantity at the right time and at the right price. It ensures products are available at the warehouse, retail units and distributors. Book stores adopt various types of inventory management methods as follows:-
Types of inventory management
Periodic inventory management
- Periodic inventory management system is a way of valuing inventory for the purpose of financial reporting.
- A physical count of inventory is performed at a specific interval of time.
- This method takes inventory at the beginning of a period of time and adds new inventory purchases during the period. It then deducts ending inventory to calculate the cost of goods sold (COGS).
Barcode inventory management
- Book stores use barcode inventory management systems to assign a specific number to each product that they sell.
- They can associate varied data points to the number. Which includes the supplier, product dimensions, and net weight.
- Other variable data such as how many are in stock can also be considered.
RFID inventory management
- Radio frequency identification is a system which wirelessly transmits the identity of a book.
- It is done so in the form of a special serial number which tracks items.
- It provides detailed product information for the same.
- It improves efficiency and inventory visibility.
- It ensures rapid self – recording of receiving and delivery happens.
Stock review
- It is one of the most effective methods which involves reviewing the stock availability.
- Small bookstore businesses with limited products can manually track the available stock.
- Large stores utilize advanced inventory management software such as SaaS and ERP to supervise the supply and demand regularly.
Just-in-time
- Most inventory management techniques foresee the existence of sufficient inventories for an unforeseen rise in demands.
- JIT is more about having a zero inventory system.
- Finished goods are made available at the right time instead.
- It helps businesses to meet customer demands without overstocking inventory and undergo holding costs.
ABC analysis
- It helps businesses to categorize their book inventory into three groups based on their value, costs, and consumption.
- Category A consists of higher value stock kept in small amounts. It cuts warehouse space and cost.
- Category B consists of books of medium value and sales.
- Category C consists of books that are of least value but high demand.
How does inventory management work?
An efficient inventory management strategy is an essential part of a supply chain in any industry. It plays an important part in monitoring the purchase of production components from suppliers. It ensures customer orders are fulfilled on time. Companies use this strategy to meet consumer demand and effectively increase sales. It helps to track movement of goods from production facilities to warehouse units and point-of-sale.
Businesses of all sizes, which includes manufacturing, retail, e-commerce, restaurants, FMCG, logistics, etc. use it to meet consumer demands and grow the company’s sales. Small book shops track inventory manually with the help of spreadsheets. Whereas, large retailers use advanced softwares or ERP’s to manage their stock.
One of the most unrecognized actualities of the book store business is that it is for a retailer to manage the inventory of their books. This is an empirical issue for a bookstore. A book store’s inventory is its substantial investment. Inventory performance is the number of times a store turns in a year. How efficiently the store manager manages to purchase what they need without misspending investment and bearing margin destroying costs.
For example return freight, wasted labor shelving, removing, packing, pricing, promotions, stock levels and shipping. This is by far the biggest factor whether a book store succeeds commercially or fails. Some other inventory management methods are regular stock review, just-in-time, and ABC analysis.
A business can be prepared with stocks as and when required. This will help them to fulfill orders whenever required.
What is SKU?
SKU is the abbreviation for “stock keeping unit”. It is a number that retailers assign to their products to keep a track of stock levels internally. It is usually eight alphanumeric digits. However, it may vary in length. If a product has a different color or size, each variation has a unique SKU number. SKUs are usually unique to a single retailer.
Smaller book stores may find it beneficial to create their own SKU system. The management of SKU is incredibly important. It allows you to analyze the cost of carrying every product so that you can determine if each piece of inventory is meeting the financial goals of the business.
SKU management allows you to optimize your inventory levels and purchasing. If you do it poorly, you have high inventory holding costs to deal with. Also, less available capital problems arising due to the same. SKU can be managed both in a manual way as well as automated.
Why is inventory management important?
Inventory is a company’s most important asset. Inventory management is where all the factors of the supply chain of a bookstore business meet. Too less inventory will lead to understocking. It will create unhappy customers and possible losses. An unnecessary large inventory will lead to overstocking. It could lead to liabilities like store cost, theft, or damage. Businesses must find the correct balance between having too much inventory and having too less.
What is an inventory management system for bookstores?
Traditional inventory management practices such as hand-counting, spreadsheets and manual order placement have been replaced by inventory tracking systems. This system can simplify the process of ordering, storing and using inventory. It automates end – to – end processes. It also improves business management, demand forecasting and accounting.
Modern book retailers make use of powerful yet easy bookstore POS systems created to handle a ton of book inventory and other products. They contain all the functions required to run a bookstore business efficiently. It also includes features of direct integration with leading distributors. You can get live product inventory, track special orders and drop shipping too.
Conclusion
Inventory management is an integral part of any business’s profits. A lot of small book store businesses don’t follow good inventory practices. Some of them have too little inventory, unable to meet customers’ demands. This drives customers away, sometimes to another business. On the other hand, some overstock unnecessarily, which leads to bleeding money from your business. Effective inventory management is between the two extremes. It requires good planning and strategy to achieve this stage.
