If you own or work for a retail business it’s vitally important you know how much stock you have at any given time. Too much and you could be left with a lot of unwanted items you’re unable to sell, too little and you’ll potentially be missing out on sales and revenue. No matter which of the two it is, they can ultimately have a large impact on how much profit you’re able to make.
The key to understanding your current stock levels is to identify where discrepancies can arise and how they can then be addressed and solved. The retail sector has one of the highest staff turnover rates in the UK and this brings with it a certain amount of challenges – how do you ensure that staff are adequately trained in short periods of time or that they work in exactly the same way as the person before them and the person after them?
When combined with the fact that we’re all human and we can make mistakes, it’s not surprising that people are often a contributing factor to stock inaccuracies and discrepancies. Here we take a look at some of the most common causes of stock loss for retail businesses…
The first and most common cause of stock loss is generated by those visiting your stores. Shoplifting cost UK retailers more than £600 million in the past year and the problem for shop owners doesn’t end there; if you don’t know what or how much has been stolen you’ll not be able to reorder those products and sell them. With the average cost per incident of shoplifting rising to £325 in recent years the additional cost of potentially lost sales can begin to have a huge impact on profitability.
Stock items are mistaken as being the same
When stock counting is conducted internally items can often be mistaken as being the same when for your stock purchasing and inventory purposes they are completely different.
An example of this would be varying sizes of the same clothing garment. If you have 20 tops that are all the same to the eye, your stock take will say you have 20 to sell.
But how many of those are in a small, medium and a large?
If you in fact have 20 garments and none in a medium size as they sold out a week ago, you’ve potentially lost a week of sales on one of the top selling sizes of that garment and the profit that would have gone with it.
Stock is in the incorrect location or mixed in with other items
Do you know where every item in each of your stores is currently located?
The reality is that over time and busy periods stock will inevitably become mixed in with other items; perhaps a customer picks it up only to decide against a purchase and drops it down in a different part of the store, or a new member of staff is unsure of where items are supposed to go.
This can lead to shelves looking full when in reality there are gaps in your stock. As with each of our previous points, if it isn’t there to sell it isn’t there to buy, so you’re potentially losing out on the profit that could otherwise have been made from each of those sales.
Simple mathematical errors or mistakes in the ordering process
We’re all human so sometimes employees will make mistakes. Perhaps they’ll over-order by 10 one week and under-order by five the next. The problem is that over a longer period of time such inaccuracies can not only lead to large stock discrepancies but also begin to shape your sales and profits.
So how does working with a specialist stocktaker answer these issues?
The key to solving stock discrepancies and loss is understanding where they’re coming from and this is exactly what we do as a specialist and independent stocktaker, using our fully trained and experienced stocktaking teams. Stocktaking is so often thought of as just numbers and tallies in a spreadsheet or on a clipboard when in essence the information it can and should give you is so much more beneficial to the business as a whole.
Stocktaking should not only give you an accurate picture of where you currently stand, but also highlight where the discrepancies have arisen from so you can then solve them and continue to trade even more profitably.
If you have any questions about retail stocktaking for your business then please get in touch with our specialist team on +44 (0)1637 874609.