GSB-55: How to Have an Effective Inventory Management System

How can you tell if an employee or customers are stealing from you? How do you know someone is not stealing your beer, cigarettes or other merchandise? Is your business losing money every day and you just don't know about it? Let's see how a great inventory management system can help you stop the leaks, stay tuned..

Welcome to Gas station business 101 podcast, I am your host Shabbir Hossain, and this is episode 55. This is the show where we discuss how to start, run and grow a gas station business successfully and give you an inside look at many real life case studies so you can follow and be successful in this business.

The topic today is How to have an effective Inventory management system. Sounds complicated? It is really not, I will not be talking about any complicated computer program or any such things. Instead, I will take a very simple decade old method that business owners used for years.

If you recall from my previous episode where I talked about various types of theft, then you may recall there are two different ways theft takes place in our business

1. External
2. Internal

External is where your vendors and customers are walking away with your money or products without paying, and internal theft is where your employees are walking away with your money and merchandise.

Since stealing cash is typically harder than stealing merchandise, and we did address the cash issue in the previous episode, let's discuss how we can have a great yet very simple inventory management system to check and see if you are losing your merchandise due to either kind of theft.

First, I need to tell you how big chain stores and companies do their inventory management then I will talk about how we do it.

There are two ways you can do inventory management

1. Item level inventory tracking
2. Department level inventory tracking

Big corporations like Circle K, 7-11, Wawa food and many other regional, local and national chains practice Item level inventory while small business owners like us typically practice department level inventory. Item level inventory tracking is more cost and labor intensive; this system requires more labor and dedicated managers on duty on every shift. Which is usually not cost-effective for most of us small business owners.

First, let's recall your typical merchandise categories and see which ones are more prone to theft.

Typical product categories:

• Cigarettes
• Beer
• Tobacco
• Soda/Drinks
• Grocery
• Automotive
• Fountain/Coffee
• Novelty

Let's discuss each category and see which ones are an easy target and which ones are not, also which ones are easy to track and which ones are not.

(Listen to the episode for the whole story)

If you have any question, feel free to send me an email at [e-mail], or you can post it on my Facebook group page by going to shabbirhossain.net

Don't forget to sign up for my very important newsletter; you can simply sign up for it by going to http://gasstationbusiness101.com/subscribe

In the meantime, if you haven't subscribed to this podcast, feel free to do so, and if you like this show, I would love to see a review from you on iTunes or where ever you download this episode from.

Here is a link to my podcast page on iTunes, if you follow this link you can give me a review right on that page. Trust me it will make my day and won't cost you anything other than maybe 30 seconds of your time.

https://itunes.apple.com/us/podcast/gas-station-business-101-podcast/

Thank you once again for joining me in this episode; I will see you in the next one.

Cheers!