A product mix is the complete range of products offered by a business. It is also referred to as product assortment, and consists of all the product categories or product lines presented to the customer. Example A fashion boutique could have a product mix that consists of: Tops Bottoms Footwear Accessories Each of those lines …
Clearance sale is a markdown event that retailers use to clear the remaining merchandise at very low prices. Sometimes the price levels at this stage of markdown can be even below the cost price of the product. What is The Difference Between Sale & Clearance? Clearance is a type of sale event with a further …
Broken sizes is a term used by fashion retailers to describe an assortment that does not have full size range anymore, due to the sell out of some sizes. When a retailer launches a line of clothing it initially launches in full size range. After a while of displaying it on the floor and selling …
Inter-branch transfer of goods is the transfer of inventory between different store locations that belong to the same retailer. This is usually carried out for single or few items to meet customers’ needs or in bulk for consolidation of inventory. Reasons For Inter-Branch Transfer (IBT) To Serve Customers In many situations an item is not …
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Inventory allocation is the process of assigning specific products, in specific quantities to be delivered to store locations, where they will be displayed and sold. Inventory allocation is typically done by the merchandiser or the inventory controller, and is uploaded on the retail merchandising system to be seen and actioned by the warehouse team. When …
Replenishment systems in retail are systems that are set in place to ensure every product that gets sold at the store is restocked, so that the store does not get into an out-of-stock situation while the products are available at the warehouse. Note: We are not talking here about purchasing or retail buying. This process …
Average inventory is usually used during the calculations of different inventory metrics that are used to assess the efficiency of inventory management practices at a company. What is Average Inventory? Average Inventory is the average value of inventory that a company holds over a certain period of time. This period could be a month, a …
Days Sales in Inventory (DSI) measures how many days it takes to sell the company’s inventory. It is used together with other metrics like inventory turnover ratio and GMROI to track how efficiently a company manages its inventory. While a low DSI can be positive or negative; ie it could mean that either the company …
Inventory management for retail & ecommerce businesses differs from manufacturing businesses. This is because retailers only deal with finished goods, while manufacturers also deal with raw materials and work in progress inventory. That’s why the process of managing inventory and the metrics related to it is completely different in retail. In this guide for merchants …
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Retail & ecommerce managers sit every year during budgeting season and plan out their next year’s events calendar. In this calendar they plan their sales events, as well as other seasonal launchings or any promotional events for the year. So why do retail stores have sales in the first place? Retail & Ecommerce Stores Have …
If you are selling on Amazon and using FBA for fulfillment of your orders, you might have thought of ways to reduce the different Amazon FBA storage fees, because they are putting a lot of pressure on your final P&L. Types of Amazon FBA Storage Fees Amazon charges sellers different kinds of fees. Some of …
Shrinkage is the inventory lost due to shoplifting, internal theft, damaged goods, or administrative errors done at retail stores. Every year, quarter or half year the retailer conducts a stock count to track all the existing inventory and then compare it with the value of inventory in the books (on the balance sheet). The difference …
Inventory is usually the biggest asset for retail or e-commerce businesses, and so it is important to be able to measure its ROI and take some steps to improve it over time. One of the inventory metrics used to evaluate inventory performance is GMROI. What is GMROI? GMROI stands for Gross Margin Return on Investment …
Inventory turnover ratio (IT) measures how many times a company turns its inventory during a certain period of time. It gives an idea about how efficiently a company is managing its inventory. How To Calculate Inventory Turnover? Inventory Turnover Formula: Inventory Turnover (IT) = COGS ÷ Average Inventory To calculate IT you will need the …
Forward stock cover measures how long the current stock on hand will cover future forecasted sales periods. This measure is used in inventory management to ensure product availability and adequate stock on hand coverage. It is also used during the buying budget calculation to ensure the inventory ordered is enough to cover sales for the …
One of the things that you will certainly come across after you have been retailing for more than 2 years is stock obsolescence. Products go through a lifecycle, and at some point they just become obsolete. Retail companies usually adjust the value of the stock they hold the further it ages until it reaches a …
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Merchandise hierarchy or product hierarchy is a way of organizing your product portfolio into different sub levels that will make it easier for you to monitor and analyze your inventory in the future. Instead of reading a report about the sales of your men’s department in general, you’d rather have a report that shows you …
Aging inventory report is one of the most important reports to keep track of when it comes to inventory management. The report lists your total stock on hand and segregates it by age into “age buckets“. These buckets can be every 30 days, but typically they are listed every 90 days and would look like …
Aging Inventory: How to Read The Report & Act on It? Read More »
One of the KPIs that you use to analyze your inventory & buying and also the performance of your suppliers is the sell through rate (aka. Sell-thru rate). Sell through rate represents the number of items sold out of the number of items received and is measured for a given period (e.g one month or …
Sell Through Rate: How to Calculate & How to Analyze? Read More »
Consignment stores are often associated with second hand or old stuff that is being sold by normal people through a store to generate cash or dispose unwanted items. What most people don’t know however, is the fact that the concept of consigning can be applied to normal retail stores, boutiques or even big box retailers. …