Please take less than a minute to let us know what you think of the blog!
We've put together a brief 5-question survey:
Ever wonder how we get weather forecasts? Or how people actually earn a living playing fantasy sports? It’s not magic, it’s math. If you know what’s happened before, you’re likely to know what’s going to happen next time. You just need to focus on the right pieces of information.
Statisticians call them “data points”. This is just a well-recorded number. If we have a lot of data points for the past, we know what to look for in the future.
Thankfully, in retail, we don’t need fancy instruments to measure wind pressure or complex algorithms to predict “average points scored the day after a rainstorm while playing on the road in the month of September” ... We just need good, solid reporting.
Look for patterns.
Go back through your reports. The more years you have available, the more insight you have. What changed from one year to the next? Was the weather a factor? Did a new employee join the team and affect sales?
There are a lot of data points you can weigh. Some are more helpful than others depending on your business environment, but here are a few to keep in mind:
- Competitive landscape (e.g. Did a competing business open up nearby?)
- Merchandising displays (How you display an item has a lot to do with how it sells)
- Weather patterns (Rain/Snow is usually not good for outdoor businesses)
- Staffing (One employee can have a huge impact positively or negatively)
- Pricing (There is a big difference between $20 and $19.99)
You can get way more granular, but those tend to have the most impact. Look closely with an eye towards optimizing your inventory.
Identify the winners.
Review your past sales reports. Pay attention to your top categories especially. What was selling best? If you’re doing a review of items, be sure to take profitability into account. Remember, high margins are more important than high sales unless you are talking about very high volume items.
Identify the losers.
Don’t let slow-moving inventory drag you down. If an item didn’t sell last year, it’s not likely to sell too well this year. Sort your reports and optimize your inventory from both sides of the spectrum. That means more of the good and less of the bad.
Remember, the goal here is to make the most money out of your inventory. Sort the reports top-to-bottom and bottom-to-top. Review each disappointing product. What (if anything) can take its place? Does it make sense to eliminate one and order more of a better-selling item? Remember, every last product on your shelf has to constantly earn its place in your inventory.
Learn from others.
Chances are you aren’t the only one doing what you do. That can come as a shock to a lot of people (especially entrepreneurs), but whatever you’re doing, someone else has likely been there before. Find those fellow travelers and learn from them.
There’s a reason successful business people tend to travel in packs: They make each other more successful. Engage your competition, study their stores, their prices, their product selection and merchandising. If there’s something you want to know, just ask. The worst that can happen is getting told “Sorry, I can’t share that”.
If your local competition isn’t an option, today’s social media make it easier than ever to connect with people and start learning from one another. Message board sites like Reddit are ideal for things like this. There are over 320,000 subscribers to their Entrepreneurs community and over 75,000 on the Small Business community.
The point is to get plugged in. Subscribe to magazines and newsletters geared toward your industry. Attend conferences and tradeshows whenever possible. In other words, network! You don’t have to be the star of the show, just show up, grab some business cards, and pay attention.
By keeping a close eye on your inventory as well as your industry, you’ll be better able to anticipate things before they happen. You’ll know when and whom to hire, what to stock and when to stock it, as well as have the information and connections to get your hands on the latest products weeks before your competition.
In other words, by making sense of the past and present, you’ll be far better-prepared for the future.
You can start getting those crucial data points today. Shopventory offers a 30-day full-featured free trial of our service with no credit card required. Shopventory is even backed by a 30-day money back guarantee. That means you get a total of 60 days risk-free!
You can start a trial today and join the thriving community of thousands of merchants all over the world who use Shopventory to optimize their inventory and live ahead of the curve!