How to keep your stock levels at a minimum
For every business owner, it’s always tempting to keep stock levels of goods at the highest level possible as intuitively, higher stock levels translate into higher number of sales made. According to the Queensland Government, a high volume of stock levels may not reflect good inventory. Instead, good stock management should allow you to maintain minimum stock levels while also meeting the customer demands.
Stock Levels for Fast-Moving and Slow-Moving Sales
There are 3 factors that all gym and fitness club owners need to take into consideration when managing stock – the quantity, the sale and storage method. Fast-moving stock items should be purchased in higher quantity and stored in larger volumes whereas slow-moving stock should be kept at a minimal quantity. You may also consider reducing your stock levels considerably simply by returning unpopular items to suppliers as well. This form of agreement between business and supplier is often referred to as “consignment sale”.
Business owners may also negotiate “just-in-time” stock control with their suppliers as well, in which your suppliers pledge to supply stock as needed. The benefit of this exercise is that you can efficiently reduce cost, manpower and storage space needed and you will run the risk of running out of stock.
Regardless of your gym or fitness club size, all stock sold must be tracked – either manually or with a computer-based tracking system. Perishable items such as protein shakes, health snacks and drinks should also be tracked according to expiry date so you do not waste any purchase orders made. Your inventory should also rotate according to the ‘first in, first out’ (FIFO) order as well to maintain freshness of all products sold, regardless of the stock levels.
At the end of the day, stock should be valued as money and packing your store full of stock is like having cold hard useful cash just sitting around on your display shelves. Regardless of your business model, it’s imperative that you constantly monitor stock levels and ensure that you do not hold any excess or outdated stock.