Inside Self-Storage Magazine 07/2004: Understanding Inventory
|Copyright 2014 by Virgo Publishing.|
|By: Gregg Salkovitch|
|Posted on: 07/01/2004|
By Gregg Salkovitch
Inventory is an issue every retailer must understand. Successful retailers will tell you inventory management is vital to their operations. Selfstorage managers need to realize retail sales are not only an added convenience but a very controllable way to increase revenues. A facility that sells retail products promotes the idea of one-stop shopping, which appeals to people and their busy lifestyles. But many managers do not grasp the basics of inventory management. They often overlook inventory counts and product ordering, which directly impacts their ability to increase sales and profits.
Why do some storage facilities sell thousands of dollars in retail products monthly while others sell less than a few hundred dollars worth? What separates the top performers from those that are not as successful? Could it be the demographics of some properties are significantly better than others? Location is important; but often facilities within a couple of miles of each other have completely different retail-sales numbers. Do facilities with more units sell more retail product because they have more customers? Records show retail sales for facilities with more than 500 units do not always measure up to those of facilities half their size.
I decided the best way to determine why some facilities thrive more than others was to call managers directly. After all, what better way to find out why operators are not achieving higher sales numbers than to ask them personally? So I began by asking our customers, “How are your retail sales? Do you need to reorder any products?”
The facilities with successful retail programs said their sales were great and their shelves were full. Conversely, three-quarters of the facilities with suffering sales responded with, “I’m so glad you called. I need to order more supplies because my shelves are empty. I had to refer my customers to a competitor down the street.” I was dumbfounded. First, I could not believe such easy sales opportunities were being lost because managers would not take 15 minutes a month to check inventory. Second, they were referring customers to their competition.
These managers have failed to comprehend that referring a customer to another facility not only results in decreased overall sales, it eliminates opportunities for referrals and future purchases. The competition gets the retail sale and the potential for new rental business.
There is a very simple solution to this dilemma: Keep your shelves full. Establish a steady reorder cycle and inventory-management procedure. Count your retail products and order supplies on the first or 15th of every month. Order before you are out of stock, not when you are empty. If you follow a regular ordering cycle and take regular inventory counts, you can be assured of higher overall sales.
Gregg Salkovitch is an account manager at Supply Side, which distributes packaging as well as moving and storage supplies. The company has developed merchandising programs for many leading companies, including Storage USA, the U.S. Postal Service, Kinko’s and Mail Boxes Etc. For more information, call 800.305.6110 or 216.738.1200; e-mail email@example.com.