If I Were in Your Shoes…
I personally spent over 15 years selling POS Software/Retail Systems in a variety of specialty retail markets. My biggest frustration was watching small retailers ($100,000-$1,000,000) spend upwards of $20,000 on a system and then, after two years, see no difference in their business. After three to five years, these retailers would decide that the problem must be in the software. Once again, they would start the process anew and then find that the new software also made no difference in their business.
The problem is that most software companies do not understand what inventory management should be. I later began a consulting practice and watched numerous sales representatives give product demonstrations to my clients. To most of these reps and their software, inventory management was (1) replenishment and (2) reviewing a monthly sales and gross profit report by item.
For many of my clients, exact replenishment accounts for a very small percentage of their inventory. Secondly, replenishment is rarely consistent. For example, the number of golf shirts needed by a golf shop varies greatly between January and June. Changing the monthly requirements is time-consuming and taking a physical inventory is probably a better solution. I also found that systems that seasonalized replenishment were out of the price range for my clients, rendering replenishment reports useless.
The second part of typical â€œinventory managementâ€ can result in a lengthy report that most retailers have little time to use, not to mention the fact that understanding that much detail is virtually impossible. I have always enjoyed equating inventory management to accounting management. Would a controller close the books for a month and then, to evaluate store performance, review the general ledger entries? That report is too much detail, so the controller goes to a financial statement and reviews a comparative analysis related to budgets and/or previous periods. It would be ludicrous to review the general ledger entries. Yet, trying to evaluate a monthly sales and profit report is the same as reviewing GL entries. When a software company passes that off as inventory management, they do not know what inventory management is.
Several years ago, I met up with Robert Brown at a trade show and we saw the basic needs being met from the ProphetLine POS Software System and we began working together for over a year to add the analysis tools that are reviewed in this document.
This really works! What is truly amazing is that it is far easier than what you have done (or ignored doing) in the past. ProphetLine and Retail Business 101, Inc. have developed an approach to inventory management that will not bury you in reports, but will allow you to focus on the great and the bad in your inventory (leaving you more time to work with your customers).
Our two companies have taken many retailers from losses to profitability by properly and easily managing the inventory investment. Many of you know the great definition of insanity, which is doing the same thing over and over, expecting a different result. So get ready to stop being insane, sleep better at night, and enjoy retailing more in the future.
Call ProphetLine Sales for the document,”If I Were In Your Shoes”.
800-875-6592 ext. 310
Alan Fisher, President
Retail Business 101, Inc.