What is retail dead stock and how to avoid it?
Any inventory that does not sell or turn over is considered dead stock in the retail industry. Retailers are at danger of losing money due to its presence. Stores without inventory management software are considerably more likely to have dead stock.
Most of the merchants do not utilize an inventory management software that is appropriate for their organization while others use poor inventory maintaining techniques. The final outcome will be dead stock in any instance.
Dead stock has a number of consequences, including lost income, greater carrying costs, and a reduction in inventory space, all of which can obstruct your business's operations if not addressed as soon as feasible. For businesses, dead stock can prove to be quite costly. Businesses can't collect the expenses of unsold items, whether they are manufactured in-house or bought from someone else.
Reasons for dead stock and how to resolve them.
A defective product.
A design or engineering error causes a product to be defective. Shoe retailers, for example, can receive things that are simply not cut to fit the size of the customer's foot. Although the product is described as a size 9, it is actually a size 11.
The solution:
As long as defective items can be returned for repair or replacement, they are the least concerning sort of dead stock. As a result, you can contact the provider and ask for a return authorization (RA). The supplier will repay you for the merchandise and, in many situations, will also cover the cost of shipping to its warehouse.
Erroneous forecasting
A company's capacity to estimate sales statistics and plan a strategy during high client demand periods, is vital to its success. Proper inventory planning contributes to a smooth supply chain, minimal expenses, competitive pricing, and happy consumers. Inventory suffers the most from poor forecasting than any other aspect of the business. Under-supply or surplus stocks can result from a failure to predict increases or drops in consumer demand. Though all merchants have poor forecasting, it's critical to identify strategies to reduce the occurrence.
The solution:
Based on real usage data, evaluate order history to better anticipate demand, and include data on economic circumstances, one of the most successful methods to decreasing forecast mistakes is to base demand planning on actual usage data. It will be quite advantageous to use inventory management software that can find trends in data to aid forecasting.
For the best inventory management software, speak to OVERSEE POS for an installation.
