We often see in data from retailers an imbalance in inventory performance – 20% or fewer items in-store generate 80% of the revenue.
This imbalance can often be missed if the overall business performance is good. It could be that such an imbalance is only discovered if the business falls on hard times and more thorough analysis of business performance is undertaken.
Using the Ranked Sales Report in the Tower Systems POS software you can quickly and easily see the top performing inventory items based on revenue or unit sales. Either metric could be useful in different situation.
Our advice is to run the Ranked Sales Report for a three, six or twelve month period. Look at the items in, say, the top 100 and determine the value of those items to your business compared to the rest of the business.
Usually, such analysis highlights inventory challenges business owners want to address by achieving greater balance of sales across more inventory items. This does not mean holding back the top performing lines. Rather, it means working on those outside the top performers, working on their success through work on placement, promotion, staff engagement and other factors over which you have control.
The Ranked Sales Report provides excellent insights into comparative performance of inventory items. The goal is to guide you to achieve greater balance so your business relies less on the star performers.
The danger of relying on star performers is the impact on the business should one or two stars fall. The more broadly based your business the better positioned it is to weather competition, challenges or a decline in one or two items. Broadening the base of your business from an inventory perspective strengthens the business.
We are happy to assess your Ranked Sales Report for you. Contact support and ask the settings we’d like, run the report, save it as a PDF and send it to us. We will share our feedback.