By Greg Carradus
Inventory. It tends to be a difficult subject for many outdoor power equipment dealers. You love the fact that the merchandise you carry makes you money, but hate the fact that it’s something you constantly have to monitor. Like it or not, now is the time when it should be a focal point, and here’s why:
The majority of OPE dealers neglect their inventory, and it’s costing them dearly. To put it into perspective, if you misplace $100 worth of parts because you don’t have organized bins, or accidentally damage $100 worth of parts because they got in the way, it could take as much as $1,000-$1,200 worth of sales to make up the loss, since the dollars you make come in net profit. There’s also a good chance you’re paying more than you need to in insurance and inventory taxes at the end of the year because you aren’t keeping your stocking quantities lean. Having money tied up in over-stocked items and obsolete parts can cost you more than any other area of your business.
There is some light at the end of this tunnel that will help you gain control of your inventory and that’s a dedicated, industry-specific business management software (BMS) system. Unlike generic point-of-sale systems that are designed to handle a wide array of retail businesses, there are several BMS systems out there designed specifically with the OPE dealer in mind. These systems are built with robust inventory control features to help you profit from the areas you need it the most. Just a few of these features include:
Manufacturer Price Lists: Industry-specific BMS systems provide you with the ability to order and load manufacturer price lists. This eliminates you from manually entering parts and pricing information for your entire inventory. Part number cross-referencing is also available, which helps keep your data clean and your parts organized.
Min/Max Features: Without question, this is one of the features that will help you most with your stocked items and cash flow. BMS systems allow you to set seasonal minimum and maximum levels. When set properly, it prevents a particular part from falling above or below your desired stocking level during both your busy and slow seasons. When your inventory shows you are below a certain stock level, you can generate an order recommendation to help get you back to your max stocking levels.
Detailed Inventory Reports: BMS system providers pride themselves on all of the reporting capabilities they offer, and with good reason. Since your BMS system is pulling all kinds of data from every aspect of your business, you have the ability to access numerous reports in real-time. Some important inventory reports include Fastest- and Slowest-moving Parts, Inventory Valuation, Serialized Aging, Sales Totals for a specific time period, and many more.
Integrated Purchasing: This is an incredibly powerful feature. With integrated purchasing, you don’t have to play the guessing game in how many of a particular part you “think” you need. The BMS system generates order recommendations and purchasing based on your sales history. Many systems also offer several purchase order interfaces so you don’t even have to manually enter your orders. With a couple clicks of the mouse, you can generate an order based on the system’s recommendations and send it directly to the supplier.
Mobile Devices: A new trend that is quickly developing to help dealers properly manage inventory is the ability to take counts and automatically upload the quantities into you software through mobile devices. This new technology saves you numerous hours of time and manpower needed to count inventory. Simply use your mobile device to scan parts and update quantities and bin locations. You then automatically upload the updates into your BMS system. This can be a godsend for conducting both full physical and cycle counts.
It’s important to remember that although all of these features are designed to help you control your inventory, there’s still a significant amount of work on your end to make sure it’s a success. You can have the best BMS system in the world, but it won’t do you any good if you don’t have the proper data in there to begin with. You need to know what’s on your shelves and make sure the data in there is entered correctly.
Make 2014 the year you profit most from proper inventory control. If you already have a dedicated BMS system in place, spend some time with your provider to make sure you have installed the most up-to-date features offered and receive the training needed to utilize them properly. If you don’t have an industry-specific BMS system in place, make this the year you commit to your inventory and invest in a product that will help you gain control. The profitability you gain from using the aforementioned features will make the initial investment worth it, and then some!
Greg Carradus is director of sales for Ideal Computer Systems, Inc. For more information on inventory control, visit www.idealcomputersystems.com/inventory-guide.