Why is Managing your Inventory Critical to Maximizing Profitability?

Posted in Resources July 06, 2010 0 Comments

Cost of goods sold consumes over 40% of every dollar your customers spend in your store. There is no other single expense that provides the

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you spend 3% more than the appropriate amount on product, it is like reducing your price by 3%. Managing your yield, waste and spoilage, and shrinkage (theft) all require disciplined inventory management. Without managing inventory and ultimately your cost of goods, then you have no insight into why your cost of goods is what it is and have no idea what type of actions you need to take to make your business more profitable.
Managing inventory looks like a daunting task. However, by utilizing tools that automate much of the effort, it is much easier to fully understand your purchase and consumption of

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it is using inventory. What are the optimum levels of each inventory item? What are the optimum ordering qualities of inventory items? Am I getting the best price and terms for the inventory items I stock? What is the correct formula of inventory usage and are operations adhering to these formulas. Is inventory walking out the back door? Do I

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Reducing cost of goods by only 3% of revenue will realize savings of over $15,000 for an average store. Managing your inventory can achieve this savings. It could

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