How Missed Sales Hurt your Business & What to do About It
If your sales are drying up there could be many factors responsible for it. And one important, but mostly overlooked, factor is missed sales. Put simply, missed sales or lost sales are your potential sales that could have happened but didn’t because the required items were out of stock. Missed sales impact your business in two ways:
Loss of revenue
It’s a no brainer! If a customer comes in, wants a product, and you don’t have it, you are losing revenue. Now consider. If this scenario, for example, this occurs just five times a day on average, tally up the losses in terms of the revenue you have lost during a week, then a month, then… well, you know what I am getting at.
The loss could be huge.
Loss of Customer
Customers who can’t get the required product will obviously go somewhere else to buy it. And once they find the desired products at your competitors, do you think they will come back just to check if you have started managing your stock efficiently? Not really. I mean some might just out of curiosity but normally people don’t have this kind of time.
And you lose not just one customer but all those potential referrals that one satisfied customer could have made.
What to do about it?
In any retail business, the first step is to start keeping a track of the missed sales and then do some simple math to figure the loss of revenue you are incurring on a daily basis. This will give you the jolt and enough motivation to straighten your inventory management.
Next, once you realize that there are out of stock products for which demand exists, the only thing left to do is to replenish your stock and convert lost opportunities into sales.
It is a good idea to keep a regular tab on missed sales to dissect the reasons for this loss of opportunity. Did you understock in the first place? Are there certain top-selling products you are not aware of? Is there pilferage? Are some products simply not entered into stock? Reviewing all these factors will help you plan a better inventory management strategy to preclude the chances of missed sales.
How Missed Sale Recording Feature in Retail Software Helps you Track Missed Sales and Create Stock Requests
Keeping in view the importance of recording missed sales for retailers, Candela inventory management software has introduced the missed sale recording feature. When a customer comes and asks for an item, the sales person will click F4 in product help field.
A screen will open up showing stock of all products, and a column showing ‘record missed sale button,’ against each product.
To record missed sale, click the button and a pop up will appear. Enter the quantity of missed sales or whatever you think is needed to replenish the stock. You can also enter comments if you want to:
All recorded missed sales will be saved in the system. The shop user can prepare a request for stock based on the missed sales.
Creating a Request Against Missed Sales
To create a request against missed sales, the shop user will go to: Shop Activities>Order Requisition
Select the radio button Missed Sale and click Generate Order. All recorded missed sales with the required quantity (the quantity added in the missed sales pop up) will load in the grid.
Click Save to save the request.
While Candela helps you record missed sales and create requests against them, it is also important to take a look at the factors that might be impacting your stock management. Missed sales recording and reports feature in a retail software will help you do develop and monitor a stock management plan.