Retail Stores Basic Inventory Management

Running a modern retail store today can be extremely rewarding for the budding creative entrepreneur. Others, may disagree, but inventory takes the biggest investment of resources; not just the money to pay for it, but decisions have to be made of what and how much to buy, where and when to buy it, how to display it, how to keep track of it and how to prevent it from walking out the door.

There are many more questions but these are the very basic.

Acquiring inventory: This is the fun part and can really get the creative juices flowing; you have done your market research; you already know what kind of store and the type of merchandise you want to carry; a good place to start is online researching your category many suppliers still carry catalogues (Some can even be downloaded) Salespeople will love to come for a visit to show you their samples Trade shows are a great place to see merchandise, place orders, meet suppliers, etc.

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Pricing: again doing your market research is very important here. Some analysis of your business needs to take place. Many retailers fall for the default method of pricing: if it cost $1 then charge $2. You can check online to know the more about the inventory management and ask questions.

Do not do this unless it makes sense! Go back to your business plan and your estimated Balance Sheet and Profit and Loss Statement. If I sell these many items at this price is that going to cover my costs?

Financing: aka how am I going to pay for my shiny new inventory? As a new retailer be prepared to pay COD or when putting in the order by debit or credit card.

Each supplier can have different policies regarding terms. You may get discounted terms right away, but not always. It might be what is standard in your industry. 

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