Inventory management extends beyond simply buying what's popular and scaling back on what's not – a lot of time and energy needs to go into developing an effective inventory management strategy. If retailers don't carefully plan out their initiatives, they may tie up capital in excess inventory, create picking errors in the warehouse or even miss sales opportunities in out-of-stock products.

"Inventory management is a continuous, concentrated effort – and a process that shouldn’t be handled solely at the operations level," Multichannel Merchant explains. "A successful inventory plan should also involve your marketing, catalog, ecommerce and merchandising departments. By managing your inventory against a master promotional calendar, everyone wins."

Focus on communication

When it comes to inventory management, communication between employees at any given merchant and with vendors is absolutely pivotal. On a store level, employees in different departments need to be able to convey which products they need to meet demand. This enables the person in charge of procurement to order enough stock to satisfy the needs of customers.

Furthermore, clear communication channels are needed between vendors and the retail brand itself. Open communication is crucial for any successful working relationship, and when vendors are able to understand the needs of retailers, they will also be better able to comprehend their inventory management plan as well, minimizing any shipping or stocking errors.

Standardize operating procedures

Establishing a regimen is crucial because it creates a standard that can be followed. By developing policies with vendors that must be adhered to, merchants can ensure their products will be shipped, received stocked and picked efficiently and accurately. Creating these procedures also helps to create a sense of regularity that minimizes the chances of merchants being left high and dry without key merchandise.

"For example: If you sell a product in packages of five, it’s critical to let your order fulfillment provider’s receiving staff know so they don't spend precious time breaking down the items into individual units, only to have the pick and pack staff re-kit the items before shipment," the news source adds.

Retail Pro offers a comprehensive inventory management solution that enables merchants to carefully monitor current stock, while also giving them in-depth sales information that provides insight on best-selling merchandise.