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Improve retail inventory management in 3 steps

2 minute read

Inventory can be described as an investment because you only receive profits after the items have been sold. Slow moving inventory stops the retail store’s cash flow which is unhealthy for the business. Not only it’s holding the shelf space for items which are selling, it also becomes less and less valuable over time. Let’s go through some of the tips and tricks on how to manage your inventory better.

1. Eliminate inventory that doesn’t sell

The easiest way to define “dead stock” is with a retail point of sale (POS) system: it keeps track of all inventory and can quickly define the stock that has been holding up your store’s space. After you have defined the non selling stock, the first try to get some of the ROI is to launch a sale. In the best case scenario, the sale would help you get rid of most of the stock. If that doesn’t work, try offering the items back to the distributor or offer items to a charity organization to get a tax write-off.

2. Decrease slow moving inventory

Define inventory which is often selling, however not as much as the store’s bestsellers. Slow moving inventory is the stage before having “dead stock”, therefore is good to analyze to avoid having more non selling inventory. Analyze it with your POS system and depending on the category, for example, if your store offers clothing, basic t-shirts might be selling all year round, however shorts will be selling only during the spring/summer seasons. Use positioning to sell more t-shirts during the winter season by putting them inside of a hoodie jacket. React timely to the seasonal items- as soon as the sales are decreasing, offer a summer season sale to sell most of the stock before the season ends.

3. Increase the amount of best selling inventory

After you have defined the lowest selling and non selling stock, it’s time to define the bestselling stock. The store’s best selling items may give even 80% of its sales only by selling a fifth from the whole inventory, which is why it’s important to always have bestsellers in stock. Use the bestsellers to increase the overall sales by offering complementary products, for example, have a special offer on hand cream when purchasing a body lotion. If the same item is available in multiple colors but only two out of three are selling, offer a “value pack” option with a special price when the customer buys all three.


Doing an analysis of your bestselling, slow selling and non selling stock can be crucial to the retail store’s success. Minimizing costs is important for each business and the first step to do that in a retail store is by using a point of sale system. Not only the business can improve profitability but also future growth. Lightspeed Retail is one of the top selling retail point of sale systems in the world. It’s well known brother Lightspeed Restaurant is already being commonly used in Malta and now the same experience is available for the retail businesses as well. Contact us now to learn more.

*The article was inspired by LightspeedHQ article “Inventory Management 101: techniques to increase your ROI”

**Thank you for the photos

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