Solomon Bruce Consulting Blog

Tuesday, September 7, 2010

"I Wish We Had a Point of Sale System Instead of the Dart Board"

   I was out shopping the other day looking for some new sporting goods equipment.  The current sporting goods that I own are fine, however, thought about looking at some newer, more technologically advanced products.  I found the manager of the store, told him what I was seeking and asked him to show me what I thought I might want.  He took me to the aisle where the products were that I was interested in, showed me the kind of product that I was interested in and then told me all of the new features and benefits of the product that I was investigating.  Because I am out of the country this week, I told the store manager that I would return to the store after I got back from my overseas trip to further investigate and probably buy some of the products that he showed me.
   As we walked back to the front of the store, I asked the manager how they determined their inventory.  One of his colleagues who overheard our discussion said, "We use a dart board.  We don't have a point of sale system!"
   Well, this too was too good a discussion  to pass on.  I asked the manager and his colleague how they determined inventory stocking levels, kinds and brands of product, etc.  Indeed, the colleague was not kidding, everything is done manually with no automated processes or procedures!  Every sale is written in paper records-- no automated tools are used to track inventory, shrinkage, obsolescence of product, faster selling brands, etc!!  Wow, this was real exciting!  As I explored and asked more questions, both the manager and colleague said that the owner is very comfortable with his paper based system.  I did ask if indeed theft, product obsolescence, too many of one brand were concerns.  Surprisingly, both individuals said NO, the owner was not concerned with that!
   I know another retail business owner who also uses all paper records for his transactions.  I pointed this out when I first became a customer.  The business owner said that his business is small enough, he only has one additional employee and few competing product lines and does not need an automated system.  I pointed out that may not be entirely true, however, what is different between the first store and the second is the number of employees and the number of products that each carries.  The first store sells lots of products, some quite small made by a wide variety of vendors and manufacturers.  The first store also  has over 14 employees while the second store has a varied, but limited product selection and has only one employee besides the owner.
   This is a matter that as a business owner you should carefully consider if you continue to use paper based records.  The sheer amount of time and effort necessary and required to review the records, identify trends of sales, customers, vendors is impossible with a paper based system.  An automated system is able to rapidly identify trends, profit margins, stock out points and re-order points automatically.  Yes, this can be done with a paper based system, however, most business owners today do not either have or are willing to take the time to do the data analysis required.
   The price of automation is very inconsequential when compared with the wide variety of data available to you.  If you are still using a paper based system, give strong consideration to converting to an automated system.  You will be amazed at how much more data you will have, how you can make better purchasing and marketing decisions and how your profits are able to increase.


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