Medication synchronization programs offer many benefits for pharmacy teams and patients. And while medication synchronization doesn’t operate...
How to Better Manage Inventory with Pharmacy Point-of-Sale
Last week, we talked about using Point-of-Sale Data in your pharmacy. Robust reporting and monitoring of key areas can tell you not only when you need to take action, but also help you understand what direction to go. One area that you may focus on in your pharmacy is how you manage inventory with pharmacy […]
Last week, we talked about using Point-of-Sale Data in your pharmacy. Robust reporting and monitoring of key areas can tell you not only when you need to take action, but also help you understand what direction to go. One area that you may focus on in your pharmacy is how you manage inventory with pharmacy point-of-sale. Specifically product movement and whether the products you carry are performing well.
But what happens when you’ve identified a problem using your pharmacy point-of-sale reports? The data shows that you need to take action. Product that’s not moving is more than wasted space on the shelf and fighting a losing battle with dust bunnies. There are costs associated with inventory that’s not moving, otherwise known as inventory holding cost. This is a great video on some basics of carrying costs and other factors that come into play with product that isn’t moving.
But what should you do with the problems you found? We’re resurrecting some tried and true methods to help you figure out what to do when your inventory needs a little TLC.
When should I start worrying about product not moving?
While every store is a bit different, and there will certainly be exceptions to the rule, a good rule of thumb is 30 days. Of course there are products, like sunscreen for example, that you stock all year round, but may not sell much of for a good stretch of time. It’s just important to be aware of slower sales on semi-seasonal products and adjust inventory levels accordingly. For items that don’t fall into a seasonal category, lack of movement should sound an alarm.
This product should be moving, but it’s not. Why?
Before you give up on your front end because key necessities aren’t moving, try these trouble shooting tips.
- Product placement – Where a product is in your store can have a huge impact on sales. Try moving the item or product line around to maximize visibility.
- Competition- Is the store down the road selling the product for less? That could be a big reason why you aren’t making the sales you think you should be. Can you meet or beat that price? Give it a try. If not, it may be time to think about replacing the product with something that performs better for your pharmacy
- Make strategic cuts-Sometimes, no matter what our perception is, a certain product line just may not be popular enough to sell. So take a hard look at what’s not selling versus what is, and consider some strategic trimming of some lines and expansion of others. For example, if hair accessories like headbands and bobby pins just aren’t moving but hair color products right next to them are flying off the shelves, shrinking down accessories and expanding hair color could make a nice improvement in your bottom line.
Should I store product?
Seasonal items like holiday decorations, Easter baskets and Fourth of July swag can still be hanging around when the holiday has long since passed. Your first step to clearing out these products is to pull out the sale signs. You might even consider putting seasonal items on sale a couple of days before the holiday, depending on what your competition is doing. If you are near any sort of big box store, you can bet that their seasonal product is hitting at least 60% off the day after the holiday and they’ve probably been running specials at 30-50% off for the last 1-2 weeks. They want the product off their shelves as quickly as possible to make room for the next round of seasonal shelves.
Check out competitors advertisements, take a peek inside the store and make sure that your discounts are equally competitive. If clearance fails, you have a couple of options, get rid of it or store it. Storage may sound like an attractive option, but you’re taking up valuable space, risking damage or facing the possibility that the item may not sell again next year. Consider donating unsalable items to charity. There are a plethora of options for these kinds of items, like schools, children’s museums or even nursing homes.
I hope that these tips help you if you’re battling inventory movement. If you’d like to learn more about managing inventory with pharmacy point-of-sale, just give us a call.