Last week, we kicked off our 5-step series regarding How to Successfully Manage Your Inventory by discussing some best practices to use during the ordering process. Today, we move on to the topic of communication.  Of all the five steps (order process, communication, receiving inventory items, audit invoices, and reports), communication is the most important. It is this process that could have your organization as synergized as a fine-tuned concerto or as dysfunctional as a baby mama waiting for the paternity test on the Jerry Springer show.

It is imperative that every employee in your organization understand their role and responsibility. In addition to your employees, the vendors you allow into your store should understand the same. Assuming you have one person (and a backup person) assigned from your organization to place orders, following are examples of what should be effectively communicated within your company:

• New products. The store supervisors, managers, and vendors all need to be notified of newly authorized products.   Not only should you let your store personnel know a new product is going to be delivered to their store, the also should know where that product will be placed for maximum selling exposure.   If you have a “Back-to-School” promotion of a new brand of energy drink you want the product placement prominently displayed.
• Price Changes. Communicate new price and cost changes. While price changes are done automatically within most systems for scanning purposes, it is always a sound practice to verbally review with store personnel to be sure display signs and shelf labels have been changed. We see exception reports with retail prices lower than costs every week. Don’t be that person.
• Discontinued Items. Is it time to mark down seasonal items or do you have items on your shelf that just aren’t moving?  What about that can of chocolate covered worms? After 4 years, it’s bound to become a collector’s item, right? Wrong! Let your store employees know when it is time to free up space for hotter selling items.
• Vendor relations. R-E-S-P-E-C-T. Do your vendors respect you or do they steamroll over you like Chris Brown on a bender? Vendors need to know YOUR policy for being able to do business in your store. If your policy is that no vendor is allowed to place a product, change prices at the time of delivery, or change quantity ordered, the vendor needs to know. If a product cost has been agreed upon, the vendor needs to know that is what you are paying and not a penny more. If you order 30 cases of Corona 12 pack bottles, then your store will ONLY accept 30 cases.  Why?  Because it is your store, not the supplier’s annex warehouse.  Vendor communication is absolutely critical.  Much like a toddler, vendors appreciate boundaries and will respect you for establishing the ground rules for doing business in your stores. Your stores are not their stores.  If you do not communicate the rules of doing business with your suppliers, you are placing your business jeopardy.  Vendors really do want you to be successful, so actively communicate with them to place product where it will sell and work with them to find the top selling and high grossing items.

As Saul Alinsky put it, “Without effective communication you cannot lead…you end up taking a walk on your own.” Everyone works best when they are all on the same page. Implementing the steps above puts your organization one step closer to perfect harmony…and that, friends, is a sweet, sweet sound. Ka-ching.