The Art of Retail Buying by Marie-Louise Jacobsen

Author:Marie-Louise Jacobsen
Language: eng
Format: epub
Publisher: Wiley
Published: 2011-11-27T16:00:00+00:00

Stock Control

Maintaining a well-balanced stock-holding and merchandise assortment is essential. But this is an area where many buyers go wrong. It is not the dollar value of the stock that counts but the desirability of that stock; that is, having balanced size ratios, basic colors, and seasonally appropriate silhouettes and styles.

Not all of the buyer’s merchandise will achieve equal success, and it is therefore critical to keep abreast of what is selling and what is not. Appropriate action should be taken to clear any slow-moving items as soon as they are identified to ensure that precious OTB funds are available to replenish items that are selling.

Remember; the first mark-down is always the cheapest. The wrong fit or wrong color has a zero value. So, get rid of it!

A perpetual inventory control system is a running record of stock on hand, in which stock on hand = beginning stocks + new arrivals.

A periodic inventory count system is a monthly check of the quantities of each item or unit. Here, stock on hand + new arrivals since last count − stock on hand at the time of the last count = sales for the period.

In today’s retail environment, computer systems automatically update the specific SKUs and require close monitoring. Basic stock-control systems alert buyers when stocks reach critical levels and re-ordering becomes necessary.

The following information is needed to calculate how much stock should be on hand and how much should be on order at each re-order. This helps the buyer to calculate the OTB provisions required for each SKU.

Determine the probable rate of sales for each SKU identified as a basic item.

Determine the ideal delivery period of each, which should be in sync with your original planning.

Establish the re-order periods or frequency needed. Your sellthough by class, by week, or, for most, by month will determine this.

Establish levels of reserves needed to provide sales that exceed forecasts. As mentioned in a previous chapter, it is a good idea to pre-determine a percentage of the OTB that is to remain untouched to allow for re-ordering, for purchasing new hot items, or for when sales are not meeting budgets.

Calculate stocks currently on hand and on order. When re-ordering a basic item, unless your SKU is unique (by style, by size and by color), a visual/manual assessment of stock holdings is necessary before re-ordering. This will help ensure that only particular items that are running low are ordered.

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