Also, over-ordering can result in too much merchandise. An overstocked Food Shop looks cluttered and unappealing. It also ties up precious capital. Listed below are practical solutions to some common pitfalls that contribute to inventory problems.

Problem: Blind Ordering. Placing an order without taking a physical count from the shelves causes overstocking or not replacing a fast moving product.

Solution: Always take a physical count of every department before you prepare your orders.

Problem: Vendor Freedom. Allowing the vendor to determine the size, variety, and price of his product in your store can result in a competitive product being squeezed out. It can also cause you not to make margins that you need to exist. Vendors will not overprice their merchandise. If anything they will under price it so it sells.

Solution: Do not allow vendors to merchandise your store. Set pricing based on the margins that you need and by the competition. Develop planograms for each department that must be followed and can only be changed with proper authorization.

Problem: Failure to track new products. Slow-moving products occupy valuable space. You may want to replace them with items that do well in tests.

Solution: Set a sales goal for each new product. Display the product in the customer pathway whenever possible. Set a performance deadline. If it does not meet your expected goals, eliminate it. If it does, make permanent space for it. Keep track of daily sales.

Problem: Holiday merchandise. Holiday merchandise does not sell once the holiday passes. It just sits on the shelf and takes up valuable space.

Solution: Plan holiday sales well ahead of time. Pricing should be implemented and POP installed at least a month in advance. The product should be highly visible. Negotiate with the vendor to set up a return policy. If this is not possible, consider reducing the price a few days before the holiday. After the holiday, write it off and remove it from the shelf.

Problem: Poorly trained personnel. Employees who are poorly trained tend to over order or under order products.

Solution: When it comes to ordering and stocking, make it easy for even the newest employee. Use adhesive product inventory tags on the shelves. They should describe the product, size, minimum and maximum inventory count. For example, a tag that reads "Bayer Aspirin 75 count Max 4 Min 2," would tell your employee that the product on that section of the shelf is Bayer, they need to reorder when the inventory is down to two or less, and they should order enough to bring the inventory back up to four.

Problem: Size variety. Carrying the wrong size or a variety of sizes of the same product contributes to poor sales because the product takes up valuable sales space.

Solution: Merchandising space is extremely valuable. Do not devote space to items that do not sell. An item may not be selling because it is the wrong size, not the wrong product. As a general rule, the smallest size is the best to stock. Avoid double facing a product unless it sells extremely well.

Problem: Brand variety. Too many brands of the same product may not increase sales. They might detract sales from the predominant brand.

Solution: Stick with major brands or regional brands with wide appeal. If you do experiment with a new brand that competes with an existing product, analyze the sales of both brands during the test period. You may find that the sales of the new product are directly proportional to the lost sales of the established product.

Problem: Discount offers. Vendors may offer you special discounts on larger purchases of a product. This can lead to overstocking and may cause you to lose sales of another product because you have cut back its merchandising space to make room.

Solution: Unless it is an extremely fast moving product, avoid the purchase. You can lose any economic savings by having your money tied up in a slow-moving product. A general rule of thumb is to carry a 10-day supply of a product if a vendor delivers to you once a week.