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Inside Self-Storage Magazine 07/2004: Understanding Inventory

July 1, 2004

3 Min Read
Inside Self-Storage Magazine 07/2004: Understanding Inventory

Understanding Inventory

By Gregg Salkovitch

Inventory is an issue every retailer must understand. Successful retailers will tell you inventory management isvital to their operations. Selfstorage managers need to realize retail sales arenot 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 notgrasp 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 inretail products monthly while others sell less than a few hundred dollars worth?What separates the top performers from those that are not as successful? Couldit be the demographics of some properties are significantly better than others?Location is important; but often facilities within a couple of miles of eachother have completely different retail-sales numbers. Do facilities with moreunits sell more retail product because they have more customers? Records showretail sales for facilities with more than 500 units do not always measure up tothose of facilities half their size.

I decided the best way to determine why some facilities thrivemore than others was to call managers directly. After all, what better way tofind out why operators are not achieving higher sales numbers than to ask thempersonally? So I began by asking our customers, How are your retail sales? Doyou need to reorder any products?

The facilities with successful retail programs said theirsales were great and their shelves were full. Conversely, three-quarters of thefacilities with suffering sales responded with, Im so glad you called. Ineed to order more supplies because my shelves are empty. I had to refer mycustomers to a competitor down the street. I was dumbfounded. First, I couldnot believe such easy sales opportunities were being lost because managers wouldnot take 15 minutes a month to check inventory. Second, they were referringcustomers to their competition.

These managers have failed to comprehend that referring acustomer to another facility not only results in decreased overall sales, iteliminates opportunities for referrals and future purchases. The competitiongets the retail sale and the potential for new rental business.

There is a very simple solution to this dilemma: Keep yourshelves full. Establish a steady reorder cycle and inventory-managementprocedure. Count your retail products and order supplies on the first or15th 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, youcan be assured of higher overall sales.

Gregg Salkovitch is an account manager at Supply Side, which distributes packaging aswell as moving and storage supplies. The company has developed merchandisingprograms for many leading companies, including Storage USA, the U.S. PostalService, Kinkos and Mail Boxes Etc. For more information, call 800.305.6110or 216.738.1200; e-mail [email protected].

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