Are you looking for the magic inventory formula that will finally solve the challenge of having the right amount of inventory in your retail store?
“What’s the magic formula for how much inventory to carry and order?”
This was a recent question in our retail community. Don’t you wish there was a magic formula that everyone could use to have perfect inventory?! The reason there isn’t – is because when it comes to inventory – there is no one size fits all approach. I know, bummer. BUT all hope is not gone…
The Myth of the Magic Inventory Formula
There’s no one-size-fits-all magic inventory formula – If only it were as simple as waving a wand to get your inventory right on point! But I can give you a general inventory formula, that will help you get started towards more profitable inventory:
You shouldn’t spend more than 48% of your projected sales on inventory.
The reason this is a GENERAL formula, not a MAGIC formula – is that it won’t work for you if you don’t have…
The Ingredients of Effective Inventory Management
- Accurate Sales Forecasting: The first ingredient in our magic formula is accurate sales forecasting. This can be tricky, because just using past sales as a guide can be misleading. You should include historical data, recent market trends, and seasonal variations.
- Balanced Inventory Levels: If you’re currently over or under inventoried you’ll need to adjust your 48% of sales formula to compensate.
- Freshness Factor: If your current inventory isn’t fresh you’ll need to fix that to free up inventory dollars. Aim to have 80% of your inventory received within the last 4 months. This ensures that you’re offering customers the latest and greatest products while minimizing the risk of outdated stock.
Introducing YOUR Inventory Formula
While I can’t give you a magic inventory formula, I CAN give you something even better: YOUR inventory formula. This formula is the cornerstone of our Profit Club program, designed to empower retail store owners like yourself with actionable insights and strategies.
The Profit Roadmap: Your Formula for Success
Inside our Profit Club program you get a monthly Profit Roadmap with personalized strategies in three areas:
- CEO: As the CEO of your retail business, you wear many hats – from marketing to finances. The Profit Roadmap provides tailored action steps that empower you to make informed decisions and steer your business towards profitability.
- CIO: This is where YOUR inventory formula lives. The Profit Roadmap doesn’t just tell you what inventory to order, but also how much and when to bring it in.
- CFO: The Profit Roadmap gives you a clear snapshot of your cash flow, profit margins, and overall financial performance, empowering you to make data-driven decisions.
Embracing the Journey
The Profit Roadmap is as magical as it gets for retail store owners – because it’s customized for your store and the opportunities we see hiding for you! Watch this free class where I explain why these three areas are the only hats you should wear!
