When a product starts selling well, it is common practice in retail to stock on that product. But a random spike in sales might be misleading false alarm and stocking up on products based on a gut feeling can become quite a costly miscalculation.
But how can you, then, correctly predict what to stock up on, without getting caught in emotions and unrealistic expectations? A sales plan is a vital part of the planning process and needs to be compiled by month, or in certain seasonal companies, even weekly.
This Is the Way the Sales Process Usually Occurs in Retail:
- Plan — How much do I need to buy of each item?
- Wholesale — Can I buy too much or too little?
- Storage — Can the product reach its assigned place?
- Sales — Could I sell all of the things at full price?
- Surplus — what’s the reduction margin resulting from reductions?
Sales plans are often based on prior earnings. But, there are additional factors a merchant should take into account — changes in local and international economic conditions, the statistics office’s consumption prediction, competitors’ decisions to open new shops, etc.. Moreover, retail sales follow trends and vacations.
Nobody, not even the shop’s manager or longtime worker, may possibly take all those factors into account. That is exactly what the Open-To-Buy planning tool is for — it will help estimate how many percentage points that the sale of a particular product group is expected to increase or decrease in the long run.
In a nutshell, Open-To-Buy or OTB makes it possible to compile a buying plan and determine correct quantities. It takes note of the products or items you have in stock and contrasts these to what you expect to market.
OTB let’s you know what your shop requirements, making certain you always order the proper quantity and therefore avoid surplus and shortage. In a nutshell, it ensures efficient sales.
Read more : https://www.connectpos.com/connectpos-officially-released-on-bigcommerce-app-store/
What Solutions Can OTB Provide?
In retail — and especially in seasonal businesses — OTB will help you determine how much to purchase but not automatically, which products to stock up on.
OTB’s core formula is known to every experienced retailer:
Revenue + Ending Inventory — Starting Inventory = Purchases
The formulation can be applied by unit, price or retail sales — whatever suits your company best.
To ascertain how much you will need to order, first you must determine how much you wish to depart in stock. By way of instance, you’ve got two units of a particular item, expect to market 6 units but also need to maintain 3 units in stock for the upcoming week.
So, just how much should you purchase?
Let us insert the numbers into the formula: 6 + 3 — 2 = 7
According to the calculation, you want to purchase 7 units.
OTB as Software
Evidently, you don’t need to take stock manually — you can leave it to applications that measure productivity, keep inventory, provide recommendations, etc.. This sort of software also variables in market trends and other economic indicators. ConnectPOS provides a tactical OTB software solution in cooperation with Targetta.
The program indicates the activities needed to fulfill the sales plan, helps establish goals and compares actual results to the program to enable the merchant to produce conclusions and corrections.
The software was made to maintain stock in check and warn the merchant when something is running low. Additionally, it takes into account the provider’s turnover and uses it to predict investment quantity by months, seasons or weeks. The software can help you make decisions quicker and make a more accurate strategy.
OTB applications helps save lots over the long term but is itself quite expensive and thus often unattainable for smaller companies. This is the reason ConnectPOS has decided to provide an alternative.
Read more : https://www.connectpos.com/top-10-brands-that-are-leading-the-trend-using-omnichannel/
ConnectPOS’s Software Will Maintain Stock for You
Several software businesses provide warehouse management systems, i.e. WMS which are responsible for handling transportation, orders and accounting. ConnectPOS has taken it a step farther .
ConnectPOS has also automated the stocking up procedure, with the warehouse management module available in our standard package.
The module lets you determine maximum and minimum quantities for goods to stay stable stock levels and predict orders based on your earnings history.
The program alerts you whenever you will need to stock up on something.
What Options Does ConnectPOS’s Warehouse Management Offer?
You place the minimum quantity for merchandise;
The program alerts you when inventory levels are approaching minimum;
The program lets you know how much to purchase once the critical level was attained;
You can set the suggested amount;
You do not need to keep an eye on inventory levels;
all of the relevant data is neatly packed into a single document;
All relevant information can be accessed with a single click;
You can set the accounting period to a week, month or period;
Contained in ConnectPOS’s standard package.
If you are using bar codes, it’s easy to keep an eye on sales, orders, inventory levels, any details about the movement of goods and all of your logistics. ConnectPOS’s points of sale software makes everything easy and carefree.
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