Outsourcing inventory management to a skilled and accurate inventory service provider can not only save you time, but also provide you with more options on storing your inventory results and combining it with your POS system.

Sometimes it’s less expensive to outsource inventory management rather than do it in-house, but even if it appears to have a higher price tag, some deem outsourcing worth the extra expense due to the efficiency and time saved by using an inventory service provider. One guarantee about every inventory service provider no matter the caliber, is that their auditors can only work so quickly in an ill-prepared store. Not only does lack of preparation diminish the potential efficiency of your inventory, it increases the chance of inaccurate counts. Additionally, proper preparation and communication with your sales representative can help you save money on your outsourced inventory. Here are some tips for helping your inventory service provider conduct the most efficient and accurate inventory while simultaneously saving you money.

1. Match Up Product by SKU or Price Point

2-3 days before your scheduled inventory management (longer if you have an extremely large store and/or back room), bring in additional employees or keep a few employees after closing to thoroughly examine each shelf and ensure all like SKUs and/or price points are grouped together. If you use barcodes that you expect auditors to scan, make sure the SKUs are facing outward. In order to keep customers from turning barcodes toward the back, consider creating shelf labels. If you do this, make sure to specify to your sales representative that you will prepare shelf labels that you’d like to be scanned. This is an important note to make, as most inventory service providers prohibit shelf label scanning unless it is specified in account procedures. If auditors will be keying in price points rather than scanning barcodes, make sure all prices are clearly visible. Look for missing shelf labels to minimize the need for price checks during your outsourced inventory. Remember that auditors are trained to recognize groups of numbers, so it’s best if all the products on your shelves are organized in formatted blocks. If you have particularly low shelves, try to bring all products as close to the front as possible for maximum visibility.

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2. Count Bins ahead of Time

Whether you’re being billed by man hours or by pieces, you can save money by counting bins and having auditors simply key in your count. If you are paying for man hours, bin counting isn’t necessary – it will simply expedite the process and minimize the man hours for which you’re paying. If, however, you’re being billed by a rate of pieces counted, you will want to negotiate that those pieces are either free or heavily discounted. If possible, request a different set of numbers (generally called a range) for the areas to be pre-counted. That way, your discount on those pieces can be programmed automatically to be deducted based on the areas keyed or scanned.

3. Make Sure Plenty of Employees Are Scheduled

Many store owners decide to host an inventory during hours of operation. While there is nothing wrong with conducting an inventory while your business is open for service, make sure to staff additional store employees if you choose this method. It is hard to anticipate what questions auditors or inventory service management may have, and it’s imperative that you have additional qualified employees and/or store managers available to assist so you don’t reduce the availability of existing personnel to your customers. Find out how many auditors your inventory service provider expects to have and objectively evaluate your store. Is it well prepared so that auditors will be easily able to ‘count with their eyes’ and handle as little product as possible, or are there multiple ‘troublesome’ areas in which efficiency and product safety would be enhanced by having a store employee assisting with the transferring and handling of product? You also have to decide whether or not you’re going to have store employees counting areas to verify accuracy. If you anticipate a fairly simple count and you trust your inventory service provider, plan on having 1 employee for every 5 auditors to assist with potential SKU checks. If you anticipate a difficult count, consider scheduling 1 employee for every 3 auditors. In either of these scenarios, if you intend on verifying a percentage of areas, decide what that percentage is and add a corresponding number of employees in addition to those there to assist customers. For example, if you expect 60 auditors and you want to verify 20% of the count, schedule 12 additional employees (20% of 60).

employees with inventory

4. Organize Special, Hard to Count Sections

If you have product in the back room, try to keep it in its original packaging until your inventory is complete. If you need to open shipments before your scheduled inventory, keep track of how much product is removed. If you have closed boxes with no labels, open them ahead of time. If there are multiple boxes that will need emptied, counted, and placed back in the box, consider having a store employee available to help with the handling and transferring of product. For freezers, make sure all products which are not on shelves are organized in crates and have a store employee familiar with quantities inside the crates assisting with the count.

5. Compare Your SKU Database to Programmer’s Database before Inventory Begins

One of the most damaging events that can cause your inventory management to start hours late or be rescheduled altogether is an inventory service provider’s failure to program your barcodes accurately. At least 48 hours before your scheduled inventory, take time to communicate with your sales representative and/or the person responsible for programming your inventory to ensure that their SKU database and your SKU database are consistent. If you receive new products after you provide your inventory service provider with a list of SKUs, make sure you provide them with the updated information well before your scheduled inventory.


Yamarie Grullon

Yamarie Grullon has years of experience creating helpful & engaging content for small business owners. As Director of Content Strategy at ShopKeep, a leading iPad Point of Sale System, Yamarie provides merchants with practical advice on all things related to business or point of sale.