As someone who has a history of purchasing in natural and mass market retail, I know the importance of a good purchasing system.
With the downward trend in technology costs, a POS (Point of Sale) system that functions as a cash register and also manages inventory and pricing is an investment that can quickly pay for itself. A good POS system can reduce your out of stocks and your inventory dollars. And that means:
- Reduced out of stocks = increased sales and happier customers
- Reduced inventory dollars = happier owners and managers
Here are four additional reasons why your POS system can help you purchase better.
1. Automating all the little things
The vast amount of a retailer's ordering time is spent reordering one of this and two of the other. There are two potential errors: 1. Not bothering with the small reorders and 2. Slaving over these decisions every order cycle. These items do need attention; they make up the vast majority of the items that you stock and sell.
However, reordering them is a replenishment function that can be (carefully) automated for the most part, making sure that these items stay on your shelf and freeing up your time.
2. Acting on deals
Dave Williams of Living Naturally told me that the average distributor has more than 3,000 deals each and every month! How many are you taking advantage of? You need a system to get those deals in hand and decide which to act on.
Those you act on should be in two categories: 1. Those that you buy into heavily to promote with sale pricing, and 2. Those that you buy a modest amount of to slightly build your inventory and sell through at regular price.
3. Following purchasing trends
Is your store on the cutting edge? Do you have the latest items featured on the Dr. Oz Show and other consumer health media outlets? Pay attention to trends—what is hot and growing both nationally and regionally. Stay up to date with newhope360's daily enewsletter and by reading Natural Foods Merchandiser.
4. Tracking price changes
One last fact from Williams: The average store loses 3 percent of its gross margin by not raising prices when its suppliers do. For a typical independent store, that could be $1,000 or more per month. Use of a POS system can show you if you’ve missed price change notices, when the items on invoices come in at prices higher than your purchase orders.
What ways are you using technology and other tools to improve your purchasing? Share your insights below.