In my next post, you'll read about the Seven Habits of a Successful Pawnbroker. One of those habits is the effective use of the PawnMaster data. The first item I want to drill down on is running the Aged Inventory Report. This should be done at least quarterly, if not monthly. To view, this report, go to Reports and select the Inventory category. Select report #1, “Items in Inventory” and click print. On the first filter select “Aged Inventory”, on the second filter choose all items or select an item type to display. Generally, on the next filter, it is preferred not to include “Bulk Items”. Now enter your start and end days, such as 365 and 730, to display items in the shop more than one year but less than two.
Now that you know what isn’t moving there are a few strategies that can be applied. Perhaps simply moving the item to a new location will do the trick. If it still doesn’t sell, list it on Craigslist or e-Bay. For items that are difficult to post online, consider using a clearance bin to attract bargain hunters, or maybe it's time to drop the price and just sell it at cost or even at a loss. In this way, you can free up some shelf space and capital for a better item.
The Inventory report #17 “Inventory Turns” is a report that few Pawnbrokers look at unless you have a retail management background, however it can be valuable data. Shorthand for 'Inventory Turnover Ratio' this report shows how hard your inventory dollars are working for you, or how often each inventory dollar is used, per year, to create profit. There are multiple articles online that explain how turns are calculated and the effect of turns on profit. As a general rule, an efficient pawnshop will have a total average of 3 to 5 turns a year. If your turns are one or less, it is time to take a good hard look at what isn’t moving and why.