PCA Magazine Winter 2020

PREMIUMCIGARS.ORG WINTER 2020 | PCA The Magazine 41 We know you’re out there—tobacco- shop owners and managers who, even today, resist bringing your inventory control into the 21st century with newfangled point-of-sale (POS) and inventory software. It’s understandable. Not many of us relish the thought of having to learn another computer aid, let alone making our business slave to its quirks. After all, you know your shop and your customers, and their wants and needs; you’re already happy enough with your take-home profit. Things are good. So why complicate life with the expense of digital inventory tracking, let alone the chore of mastering its use and retraining your employees? We grant that some merchants are possessed of a savant-like talent for managing inventory entirely in their heads, or on paper. Maybe they’ve just got their operation streamlined, stable and humming, and they perceive risk in change. Even still: One of the lessons repeatedly learned by the majority of new technology adopters is that digital aids enhance life in myriad and surprising ways. (Howmany resisted smart phones before surrendering to their charms?) It is a stubborn fact that the right software can help retailers identify strengths and weaknesses in a business’s product flow—bottlenecks in your supply chain, weak performers that gobble up shelf space only because you personally admire a product, sleeper items whose popularity you underestimate, leaving you short of stock often enough to annoy customers and drive them to the competition. A POS system speeds check-outs and product look-ups, and improves customer experience. For the merchant, the database working with your POS system can train a unique kind of lens on the business, suggesting possible improvements that might otherwise go unnoticed. Just a tweak here or there in your inventory practices can boost profits. Inventory software is like a truffle hound for uncovering those nuggets of obscure or counterintuitive info you can leverage. Why is inventory control so important? Randy Silverman, owner of Klafter’s Inc. in New Castle, Pennsylvania, puts it this way: “Inventory is the lifeblood of running our businesses. Without it we lose sales opportunities. With too much of the wrong products, we lack the capital to invest in more profitable and more liquid inventory.” Silverman’s family owns 17 retail tobacco outlets and a premium cigar distribution firm, so he has put a lot of thought into inventory control, the result being a comprehensive list of issues he takes into account for existing items: Historical movement of the item: • How long does it take to sell through a box? • Howmany different customers are buying it? • If only one customer is purchasing this item, are you vulnerable to be stuck with it if the customer discontinues purchasing it? Availability of the item: • What is the lead time from the manufacturer? • How long does it take to receive the product once an order is placed? • Is it a seasonal item? • Is it often placed on backorder? • If products are placed on backorder too long customers will look for alternative sources for the product or will switch to another product. Order minimums or promotional buying opportunities: • Is there a minimum order to purchase? • Are there any promotions that would entice increasing our purchase amount? Continue to carry? • Does it sell well enough to justify continuing to reorder? • What is a desirable turnaround to justify continuing to carry the product? • Are there better items to try to carry? • Better margin items. • Faster selling items. • Howmuch to bring in at one time?