Selling musical instruments can be a profitable venture — but some instruments sell better than others.
While mainstream instruments like guitars and violins are more likely to fly off the shelves, instruments like tubas and french horns are more niche and less in demand. And if a type of instrument or accessory sits on the shelf long enough, it may be deemed overstock, which happens when you buy more of an item than you can easily sell.
Learning how to address overstock is an essential part of managing music store inventory. Overstock can be frustrating as it takes up space on shelves, is difficult to sell, and reduces inventory turnover — but there’s hope.
In this blog, we’ll explain our seven top strategies so you can keep your inventory moving and sales high. Let’s get started!
1. Analyze Sales Trends With a Digital Inventory System
The best thing you can do to get your music store inventory management under control is to invest in a point of sale (POS) system. In addition to a variety of other useful features, a POS system tracks your inventory in real time, automatically adjusting totals when you purchase new inventory and make sales.
Having constant access to accurate inventory totals helps you identify trends and make more informed decisions regarding inventory. If you notice a product isn’t selling, consider ordering less of it in the future.
A POS system also allows you to set automatic reorder points for specific products. These are most useful for your top sellers — when your stock drops below a certain threshold, the system automatically places an order to replenish your supply. This way, you never run out of your most popular products.
2. Practice Just-in-Time Inventory Management
Just-in-time (JIT) inventory management is the practice of ordering new shipments of product as close to the time of sale as possible. This requires precision to avoid running out of items, and is most advisable for products with lower sales.
To implement this strategy, find reliable suppliers who can quickly provide you with new shipments. Make sure to take delivery time into account. Although you want the new stock to come in close to when you run out of the item, you don’t want to run out first and miss any opportunities to make sales.
Related Read: Manage Your Musical Instrument Inventory With These 7 Tips
3. Use Demand Forecasting
When you order inventory for your retail store, you’re predicting how much you think you can sell. However, you can improve your music store inventory management by making a more educated prediction.
Create sales forecasts for individual products and for your music store as a whole. Base these predictions in past sales data, market trends, and seasonal fluctuation. To create effective predictions, pay attention to trends in the market and do research to determine what trends may be coming.
Sales forecasts help you plan out your inventory strategy for the future, but patterns aren’t likely to remain stagnant. For this reason, it’s important to adjust your sales forecasts based on changes you recognize at your music store and in the market as a whole.
Related Read: Music Store Business Plan: 5 Steps to Success
4. Separate Inventory With ABC Analysis
Your music store likely stocks a variety of musical instruments and accessories, and it’s difficult and time-consuming to pay attention to sales data for each one individually. To simplify this process, some retailers use ABC analysis.
ABC analysis is the process of sorting all of the products you offer into groups (for example, A, B, and C groups) based on how fast they’re selling. Group “A” contains high sellers, “B” contains moderate sellers, and “C” contains low sellers. You can modify your inventory strategy for each one — purchasing the most of group A, less of group B, and the least of group C.
Because you’re likely making most of your revenue from group A, the products in this group deserve the majority of your attention. Be sure your shelves are stocked with the right amount of inventory for these products. Give moderate attention to group B, and be more flexible with group C. Keep stock of group C products relatively low and consider employing liquidation strategies for these products.
By creating groups and using ABC analysis, you can simplify your processes, saving time and money.
5. Build Strong Supplier Relationships
Managing your music store inventory becomes easier when you have strong relationships with suppliers. These relationships should be mutually beneficial and based on trust. To build and maintain these relationships, it’s important to keep your word. Pay the agreed upon amount according to the agreed upon schedule and fulfill promises you make to a supplier.
Strong relationships with suppliers allow you to negotiate better terms, including bulk discounts. You may also be able to negotiate faster replenishment cycles and more flexibility in order quantity, which can help you order correct quantities, helping you avoid overstock.
It might also be beneficial to purchase from multiple suppliers depending on the products you want to order and the deals you can negotiate. This can also be helpful in the event of a shipping disruption. If there’s an issue with a supplier, you won’t have all your eggs in the same basket. Do your research, determine which supplier or suppliers are best for your business, and keep your promises to generate trust over time.
6. Conduct Regular Inventory Audits
It’s important to conduct manual inventory audits at your music store. Even if you’ve implemented a digital inventory system, manually count out each item to make sure the counts in your system are accurate. This helps you identify errors and make corrections before issues arise.
Correct inventory counts are essential to optimizing your purchase strategy and inventory levels. If you’ve set automatic reorder points and counts aren’t accurate, you may end up with overstock or running out of an important item.
Portable barcode scanners make inventory audits easier, allowing you to easily find information about an item and update totals.
Related Read: Manage Your Musical Instrument Inventory With These 7 Tips
7. Employ Overstock Liquidation Strategies
Despite your best efforts at prevention, some items will sit on the shelves for a while and end up as overstock. When this occurs, you want to liquidate these items quickly to make room for new items that sell better.
Here are some ideas for getting rid of overstocked inventory:
- Product-specific marketing campaigns
- Clearance discounts
- Buy one, get one (BOGO) deals
- Limited-time offers
- Rewards for loyalty programs
- Bundles
- Repackage inventory
- Display inventory prominently in the store
- Employ cross-selling techniques
Clearance sales are most effective when they run for a limited time. As you advertise these deals, emphasize “limited-time offers,” motivating customers to make purchases more quickly. Making a lower-sales item a reward in a loyalty program can also help you turn these items over.
Bundles can be effective when you pair products that are performing well with items that aren’t.
For example, if you’re having trouble selling cleaning and maintenance products for an instrument, you can bundle them with that instrument at a reduced price.
You can also sell more of an item by placing it in a new location in your store. Try placing lower sales items in a more prominent location in the store where they’re clearly visible to customers. If an item is too high on a shelf, put it on a lower shelf to make it more accessible. You can also place a low sales item next to a high sales item, which will help it gain more attention. This technique is called cross-selling.
Related Read: 10 Music Shop Customer Loyalty Ideas To Keep Customers Coming Back
Improve Music Store Inventory Turnover With Music Shop 360
Even at the most successful retail business, some items end up sitting on the shelf and becoming overstock. The key is to use the right strategies to sell these items quickly and adapt your strategies to minimize overstock in the future.
By using a capable digital inventory system, you can keep track of all of your inventory totals and analyze sales trends so you can categorize your inventory into groups with higher and lower sales. This will simplify your process and help you order the right amount of each item.
When overstock does happen, create sales, discounts, limited time offers, and bundles to increase turnover. By reducing overstock, you’ll improve turnover, increase revenue, and find greater success as a music store owner.
Modern POS systems include inventory management features that can help you keep track of inventory totals. While there are a variety of options on the market, you need a POS system designed specifically for music stores: Music Shop 360.
Music Shop 360 is a cloud-based, all-in-one POS solution that helps you run all of the operations of your music store, including payment processing, inventory management, e-commerce, marketing, and more.
To see what Music Shop 360 can do for your store, schedule a demo today!
