Why is inventory management important? Like all other business owners, executives and managers, music retailers have the inherent responsibility of carefully managing operating revenues, expenses and cash expenditures in an effort to preserve and maintain cash flow. But music retailers have the additional responsibility of managing inventory levels—the largest ongoing cash expenditure of any typical retailing business.
Because so much of a retailer’s cash is tied up in inventory, the mismanagement of inventory can put even the most profitable retailer out of business in short order, from a lack of cash flow. This is why it’s crucial for every retailer to understand the basics of good inventory management.
Watch this video for an understanding of the importance of effectively managing your music products inventory and related cash flow.