Purchasing, storing and selling inventory are the most significant business processes for a convenience store. Managers should implement proper internal controls and inventory policies to optimize these processes. A better inventory system means faster inventory turnover ratios, less spoilage and higher financial margins.
Choose a System
Depending on the size of the convenience store, you may want a periodic inventory system or a perpetual one. A perpetual system means you decrease inventory each time an item is sold. It involves bar coding inventory and implementing an electronic point-of-sale system. It's more efficient and more precise but is also expensive to implement. Smaller convenience stores with lower volume sales may use a periodic system to save on costs. They won't have to buy expensive electronic equipment, but they will have count inventory on a periodic basis, which can take more time.
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Since convenience stores sell perishable items, their owners need to be experts at forecasting demand and purchasing inventory. Over-purchasing means that inventory will become obsolete or spoil; under-purchasing drives away customers if you can't meet their needs. Although it seems convenient to allow employees to place orders whenever necessary, owners should place controls around purchasing. Require employees to fill out a purchase requisition and only allow managers to place orders. Managers can analyze past data and evaluate industry trends to ensure they're stocking the right products in the appropriate quantities.
Grocery stores make fairly small revenue margins on sales, so it's critical to control inventory costs. A preferred vendor and supplier list is an important step to keep costs low and avoid fraud. Managers should request price quotes from different local suppliers for common inventory. The convenience store may be able to get discounts by promising to source all of a certain product from one supplier. After determining the most reliable and cost-effective vendors, the owner should create a preferred vendor list for different products and require managers to use approved vendors. Without an approved vendor control, managers could defraud the company by selling to a high-priced vendor for kickbacks.
Make sure that your inventory environment promotes efficiency and extends product life. Convenience stores must have the ability to store refrigerated, frozen and shelf-stable products. Storage units should be equipped with thermometers to keep products at the optimal temperature and maintain product quality. Employees need to be able to restock frozen and refrigerated foods while minimizing exposure to room-temperature environments. It helps store workers easily restock inventory when boxes are clearly labelled with the label facing outward.