Change the way you manage your inventory by learning the industry’s best practices
As a head professional, you already know the ins and outs of the golf swing, can deal with challenging member requests and could organize the tee sheet in your sleep. But managing your shop? That calls for learning on the job. If retail doesn’t come naturally to you, start by reading this blog to running a killer pro shop.
What is Inventory Management?
Your club pro shop is where golf meets retail. Pro shop inventory consists of apparel, equipment, accessories, and more, including branded golfwear, clubs, bags, and shoes. Essentially, we’re talking about all the items you stock and sell in your store.
Inventory management refers to the process through which you order, store, and use the products that appear on your shelf. How often should you order a particular item? How fast can you sell each item? How should you categorize your stock within your store? These are all important, behind-the-scenes considerations of an inventory manager.
What is the first step of inventory management? Know your stock and understand how it sells. It’s essential to have accurate sales records to guide your decision-making. In the golf industry, apparel and equipment often sell on a seasonal basis. (You won’t move too many pullovers in the dead of summer, but they’ll start flying off the shelves during the cooler months.) You have to know when to replenish certain items, how to price them, and at what point you’ve got to simply get them off the shelves.
Understanding the ABC Inventory
Once you understand the basics of inventory management, set up a system to make sense of your stock.
Apply the ABC method — Always Better Control — to inventory management in order to streamline your operations and maintain positive cash flow. The method draws on the famous 80/20 rule in economics, wherein 80% of your output comes from 20% of your input. In pro shop terms, that would mean that less than a quarter of your inventory accounts for almost all your sales. Is that the case for you? If so, you need to identify what makes up that 20%.
With the 80/20 rule in mind, pull up your pro shop’s sales data so we can identify your most important goods. We’ll divide each item into one of three categories based on the profit margins it generates:
A Inventory: Your top stock. It rarely runs out, if ever, because it sells well and is constantly replenished.
B Inventory: These items sell regularly, but cost a little more to hold onto.
C Inventory: Drives the fewest sales, generates little revenue, and accounts for too much in inventory costs.
By classifying your products into these categories, you now have a better understanding of which ones to prioritize and which to cut. You’re on your way to becoming a more efficient inventory manager!
Better Manage Your Inventory
With a little extra knowledge now on hand, here are some best practices for efficient inventory control.
Also known as low turn stock, these are the products that haven’t sold and have become obsolete or outdated. Unsold merch takes up space and costs your business money — and is just plain frustrating. You may not be able to rid yourself of your dead stock overnight, but you can learn from previous mistakes. Consult your sales history to pinpoint the items that keep appearing in that dead zone — and discontinue those orders! Get creative in order to rid yourself of your low turners: Have a clearance sale, repurpose those items, or donate them to charity.
A lot like golf course management, inventory forecasting can improve your endgame without tinkering with the fundamentals. Looking ahead, inventory managers need to calculate how much product they’ll need to stock in order to fulfill their upcoming orders. When forecasting, it’s important to consult those in other departments as they’ll have input on upcoming trends. It also helps to be proactive and constantly analyze your sales and production throughout the year, making notes you can refer to the following year. One of the biggest forecasting aids is a solid inventory management software, just like the one Chronogolf users rely on every day
Live Inventory Tracking
To properly manage inventory of any type, it’s crucial to understand where you stand on sales at any given moment. Live inventory tracking allows for a real time analysis of where you stand in relation to your sales. Chronogolf’s easy-to-use point of sale software enables pro shop managers to follow the status of their entire inventory as it comes and goes.
Keeping a finger on the pulse of your day-to-day operations is just as important as understanding the big picture. With effective business intelligence tools, it’s easy to analyze the long-term and short-term metrics you need to qualify your success. Using interactive and dynamic dashboards on a daily or weekly basis, you’ll be equipped to make smarter decisions going forward.
Live Inventory Reporting
Now that you understand how to classify, manage, and track your inventory, you can take control of your stock and make your point of sale’s reporting tool work for you. Your cloud-based POS system acts as an all in one inventory management dashboard that you can access on the go from your smartphone or tablet, or from your laptop. With real-time visibility, you can answer customer or employee questions about your stock immediately thanks to centralized inventory management and payment processing tools that congregate in one system.