It is important for any business (whether it is a large organisation or a sole trader business) to know how much and what type of stock they have on hand. Stock refers to all the goods a retailer has in store. It includes all items on the shelves and fixtures and all items in the storage areas.
The aim of stock control is to try to balance the amount of goods a retailer has in the store against the amount of sales that the store makes. A business will try to maximise it’s stock turnover while carrying the least amount of stock possible. Not enough stock leads to lost sales. Too much stock could lead to the need for marking down the stock in order to turn it over, which reduces the margin.
An effective stock control system will minimise stock loss through reducing errors, reducing waste and minimising theft. It will help reduce the costs associated with stock loss, increase sales and ultimately increase profits.
Efficient stock control reduces the risk of accidents and injury through good housekeeping, as well as reducing the costs of insurance, workers’ compensation payments and the time lost by injured staff. Having a neat, tidy clean store creates a very good impression with the customers, encouraging them to enter the store and make a purchase. It also helps staff feel positive and enjoy their working environment.
Efficient stock control, including stock rotation systems, means old stock does not accumulate and pass the use-by date or become obsolete or out of fashion.
In summary, efficient stock control policies and procedures reduce costs, increase sales and therefore increase profit.