Tuesday, April 04, 2006

Inventory Tracking Schemes

The new merchant account is kind of crystallizing some thoughts I've had about inventory tracking. I've really waffled on the issue of how to organize my inventory, but I think the new system I'm implementing now will be easier to use, if only because it will be well-defined.

When I first started selling my products, I didn't track inventory at all (I was thinking I'd just get some money out of my yarn stash by making it into stuff and selling it). When I started getting more serious about it, though, I noticed that some colors sold better than others and I wanted to get some data on that so that I could forecast demand. As I started getting a larger selection of colors, though, it became tedious to track every item of each color in the inventory. I also started making these really cute seasonal scrubbers in whatever design and quantity suited my latest whim, and some of them (like the Thanksgiving turkeys) used multiple colors.

The way I used to track which ones were selling was to give each item a removable price sticker with its item number on it. When I sold an item, I took the sticker off and stuck it on my copy of the sales receipt. This proved to be somewhat kludgy at the point of sale. Sometimes the customer liked holding the item so much that it was impolitic to ask her to relinquish it long enough for me to get the sticker off. Also, I did a show that had central checkout, so I couldn't make my own sales slips or ask the cashiers to jot down my item numbers. And on top of that, I had to make sure each and every item had the proper price sticker on it, and I had to print out all of these stickers. I've got a stack of price sticker sheets nearly an inch tall, each with a different item number on it. Clearly, this is not going to work on a large scale.

With the POS machine I got, though, I can record cash sales as well as credit card sales. To make things easier, I should record all sales through the machine so that when I batch it out at the end of the day, I will have one slip which will total up all my day's sales and I won't have to reconcile it with my handwritten sales slip book full of stickers. I can track what items were sold by doing inventory at the end of the show. I won't be able to distinguish between purchases and shrinkage, but then again it really doesn't matter that I can't, and it will save me the tedious task of figuring out what sold on which receipt at what price and why my totals are off by the price of one scrubber.

So I've made an Official Color List that lists all the colors of stuff I make. Now I am making a table that shows which items are made in which colors. Then I will go through my item list in Quickbooks and the corresponding one in ZenCart and make sure I have an item listed for each combination of color and style. And since I've made the 10th my deadline to finish merchandise for Baby Animal Days, I will conduct a physical inventory on the 11th and make sure all the quantities are correct. This will probably take me several days to do, with babies crying on each arm. But it should be very worthwhile. I will still be able to track which colors are popular, without having to muck around with the specialized price stickers. (I will still need to make price stickers, but they will only have prices on them and not item numbers, and I can put them on when I do the inventory and take them off when I do inventory at the end of the show.)