Keeping sales and inventory data in sync can increase profits and customer satisfaction.
- Inventory management is critical for retailers and restaurants.
- By choosing the right point of sale (POS) system for your business, you can effectively manage your inventory.
- Inventory management is successful if you have fewer incorrect shipments, out of stock and unavailable (obsolete or unsaleable) items.
- This article is aimed at small business owners interested in implementing a POS system to help with inventory management.
mediaindonesia.net– If your business sells physical products, you need to manage inventory. Inefficient inventory management can cause a number of problems, such as high storage costs, not having products available to customers, having products in the wrong place, and having too much product, forcing you to sell at a discount.
Read on to find out how the right POS system can improve inventory management, increase profits, and improve customer satisfaction.
What is inventory management?
Inventory management involves having enough products to meet demand and having your products available in the right location when they are needed. Editor’s Note: Are you looking for the right POS system for your business? Please complete the following questionnaire to be contacted by our supplier partners regarding your needs.
If you have too many products, you will run out of space to store them, which could lead to storage or warehouse expenses and force you to sell leftovers at a lower price, reducing your profit margin.
If you don’t have enough of a product, you will lose sales. Your customers will start shopping with your competitors, and your customers’ satisfaction and reviews will suffer. When thinking about inventory management, keep these key components in mind.
- Visibility: Find out what you specifically have and be aware of where your products are.
- Inventory: Make an educated guess about how much of each item you will need to meet demand within a certain time frame.
- Purchasing / Restocking – Know when to buy stocks so that they arrive in time to meet demand.
- Storage: Calculate how much space you have to store inventory and send your products to a suitable storage area if necessary.
- Analytics: Understand data that provides insights on how to sort inventory more effectively in the future.
- Multi-Channel Tracking: Allocate inventory levels between physical locations and fulfillment centers for e-commerce orders and adjust inventory as needed.
Who Needs Inventory Management?
Among small and medium-sized businesses, retailers and restaurants typically have the greatest need for inventory management. Retailers often sell multiple products, many of which differ in size, material and color. Keeping track of all of these items and making sure they are available when customers are ready to purchase is critical to a business’s success.
Restaurants have a slightly different problem because their inventory includes ingredients. If an ingredient is missing, the chef cannot prepare a particular dish and customers will be disappointed. The same goes for the bars that serve cocktails. Many restaurants also have to deal with the seasonality of ingredients. A good inventory management system can ensure that all the necessary ingredients are available.
Inventory management techniques
Business owners use various inventory management techniques to optimize inventory levels. The simplest technique is perpetual inventory management, which means counting inventory as it arrives and subtracting when items are sold or lost due to damage or theft. This system is often combined with demand forecasting, which uses past sales data to anticipate future demand and quantities to order.
Some companies use just-in-time inventory management to minimize storage costs. It works well when the supply chain is consistent, but can cause problems when a problem occurs along the way.
To avoid running out of stock, some companies use Safety Stock Inventory, where they are instructed to hold a small amount of inventory more than expected demand. Another technique used when sales of certain products are constant over time is the reorder point formula. With this method, reordering is triggered when inventory levels drop at some point or before a period of high demand based on past sales data.
Inventory management of the store
While inventory management can be complicated and error-prone when done manually, inventory management software solutions can greatly simplify the process. In particular, small businesses can benefit from the inventory management functionality built into some POS systems.
What is a POS system?
A POS system is a combination of hardware and software that a cashier uses to process payments for sales. Although there are third-party POS systems, most POS systems are purchased directly from payment processing companies.
POS hardware costs range from $ 299 to $ 1,400, depending on the company and components. POS software costs between $ 20 and $ 272 per month, with the cost increasing based on the number of registries using the software.
POS hardware typically includes a touchscreen device on a stand, a credit card reader, a cash register, a receipt printer, and (for retailers) a handheld scanner.
In its simplest form, POS software accepts various types of payment and allows the cashier to select items for sale from a list of products. View item prices, calculate sales tax and implement discounts, promotions and additional costs. Many modern POS software systems have more advanced features, including inventory management.
How a POS system can help with inventory management
When configuring a POS system with inventory management capabilities, current inventory and product information must be loaded into the system, including product names, descriptions, categories, supply prices, retail prices, SKUs, product codes, bars, quantities and suppliers
Whenever you mark a sale, the software will automatically adjust the inventory levels of the items. This gives you a number of benefits.
- Automated Inventory Tracking: This reduces the time employees have to spend on inventory control and the need for error-prone manual inventory counting.
- Reports – View sales and inventory levels by location or time period so you know when to reorder or run a promotion. Valuable POS sales reports include information on best-selling products, low-turnover products, most profitable products, and items that are running out of stock.
- Quick Visibility: The system allows employees to quickly see if an item is in stock, providing an easy way to monitor inventory levels and prevent out of stock.
- Remote management: if your company has multiple locations or channels (e-commerce and physical stores), the system will allow you to view the inventory levels of the products in each location and channel without having to physically go.
- Dynamic Inventory Management: Better insights enable companies to use inventory management techniques such as just-in-time, perpetual inventory, and reorder point to minimize costs and maximize sales.
The best POS inventory management systems
Not all POS systems have inventory management capabilities. Here are our top picks for POS systems that include inventory management.
1. Ideal for startups and small businesses: Square
Square has several iterations of its POS system: Square POS (free), Square for Retail, and Square for Restaurants. For startups and small businesses, where every dollar counts, a free tool like Square POS can make a difference and is scalable as the business grows. The inventory management part gives you daily alerts on low or out of stock items, and the software offers downloadable reports. Square POS can support thousands of SKUs, but is best for businesses with relatively simple inventory needs (inventory on hand, reordering, and moving inventory between locations). It does not support more complex inventory tasks, such as grouping, parts, assembly, and custom orders, for companies with more complex inventory management needs.
Square POS also integrates with third-party inventory management software vendors, including Shopventory, SKU IQ, and Stitch Labs. Payment processing fees are 2.6% plus 10 cents per transaction.
2. Best overall value: excursion
Hike’s POS system supports multi-location stores with detailed reports so you can dig deeper into specific inventory and sales details. It is easy to use and features advanced features, including variant product management, composite product management, and layaway.
Its affordable plans, which start at $ 69 per month, can be increased or decreased, making it a good option for seasonal retailers and pop-up stores. The software is loaded onto an iPad to create an iPad POS system, so you can take it wherever you go.
If you sell in stores and online, Hike may not be the best option, as only its more expensive plans, starting at $ 89 per month, support ecommerce. The more expensive plans also have built-in label printing capabilities, support multiple delivery address profiles, and have multiple store features such as stock transfer and store-based user access.
Unlike other POS system providers, Hike is not a payment processor, so you will need to hire a third party to process your credit card and other non-cash payments. Hike integrates with Square, Worldpay, Clearent, Evo, PayJunction, Elavon and PayPal.
3. Ideal for retail: Lightspeed
Retail companies with large and complex inventory can improve inventory management using Lightspeed for Retail. It allows companies to track inventory at a granular level, sell unique product variants and packages, manage work orders, track serial numbers as well as SKUs, set up custom reorder points, and fulfill special orders.
A distinctive feature is its supplier network, which allows you to discover new products, purchase and reorder products, and track shipments within the app. It has robust reporting, with over 40 customizable reports integrated along with graphs and tips.
Although Lightspeed has a free trial, there is no free plan. Plans start at $ 69 per month for a membership. Additional registrations cost $ 29 per month. Payment processing fees are 2.6% plus 10 cents per transaction.
4. Best for restaurants: Toast’s xtraCHEF
Toast is a POS system designed specifically for restaurants and has a number of industry-specific features.
You can track the freshness of ingredients based on when they were purchased and offer a countdown timer for out of stock items. You can order ingredients in the app, manage your suppliers, create purchase orders and import supplier invoices. Other noteworthy features include cost of goods sold analysis, food waste reports, product mix reports, and a shelf layout map showing where the actual kitchen inventory is stored.
While Toast’s xtraCHEF has a free version, only the paid versions, Starter and CHEF’s Choice, include inventory management. It does not publish its price; It will be necessary to request a quote from the company.
Toast’s pricing starts at $ 79 per month for one terminal and $ 50 per month for each additional terminal. Read our Toast POS review to find out more.