Liquor store inventory management isn’t easy. And here’s the main reason why:
On average, a small to medium-sized liquor store carries between 500 and 1500 different brands of alcoholic beverages. For large stores, it may be 2,000 to 3,000. This is why average liquor store inventory start-up costs average $30,000-$100,000.
Understanding stock levels for each brand and product day-to-day isn’t possible without the right tools. This is the promise of a liquor inventory management system.
Liquor software helps you manage inventory by:
- Updating your inventory database in real-time based on transactions
- Reconciling manual counts with your inventory database
- Providing analytics and alerts about stock levels (e.g. reorder alerts)
- Helping you forecast demand and seasonality
Bottom line, without a liquor inventory management system, inventory counts are prone to human error. Plus, it’s difficult, if not impossible, to have up-to-the-second data about stock levels. This guide will offer you everything you need to know about managing liquor store inventory.
Table of Contents
- What a liquor inventory management system is
- How these systems solve top inventory management challenges in liquor stores
- Key benefits of liquor inventory software platforms
- Tips manage liquor store inventory more efficiently
What Is a Liquor Store Inventory Management System?
A liquor store POS typically includes inventory tools. These tools, simply stated, provides a liquor store with an accurate, up-to-the-minute count of stock based on transaction data.
When a case of beer or bottle of wine is sold, it’s removed from your inventory database in real-time. Ultimately, inventory management tools for liquor stores help with these tasks:
- Provides real-time tracking of liquor store inventory levels.
- Helps optimize inventory levels to prevent overstocking or understocking of products.
- Automatically generates purchase orders or replenishment orders when inventory reaches predefined levels.
- Offers reporting tools to analyze sales trends, identify popular products, and make data-driven inventory decisions.
- Assists in detecting discrepancies and potential theft by comparing sales data with actual inventory counts.
The key promise: This type of system simplifies complex tasks in managing a wide range of alcohol products. This frees up time and enables liquor store operators to focus on customer service, helps cuts operational cuts, and reduces inventory shrinkage.
How Does a Liquor Inventory System Work?
Liquor inventory systems are generally a tool within a store’s point-of-sale software (POS). A unified POS and inventory system allows for more accurate, real-time data keeping, as sales and transactional data can be used to update the database in real-time.
In general, when you install a POS system, you’ll conduct an accurate inventory count (and can use handheld scanners that sync data). Then, you can move to monthly or quarterly inventory audits.
Solving Key Inventory Challenges with a POS System
Inventory management is one of the hardest tasks in running a liquor store. Not only is purchasing new inventory capital-intensive, but liquor stores may have limited storage space and must keep up with seasonal and promotional items.
A liquor inventory system helps to solve many of these challenges. They include:
- Product Variety – Liquor stores carry hundreds of different SKUs, with various brands, sizes, flavors, and types. Inventory software helps you keep tabs in real-time.
- Seasonal Items – Inventory needs in liquor stores are seasonal. Demand increases around holidays, for example. Therefore, software that shows you seasonal demand helps you plan more accurately.
- Cash Flow – Purchasing liquor inventory is capital-intensive. Improved inventory management helps reduce costs and improve inventory efficiency.
- Spoilage – Some alcoholic beverages can deteriorate over time. An inventory system helps you monitor expiration dates and storage conditions.
- Theft – A liquor store inventory platform helps identify discrepancies between stock counts and sales data. This can help uncover theft and shrinkage.
- Supplier Relations – Paying invoices on time and managing supplier relations ensures timely deliveries and competitive pricing. An inventory platform can automate reordering, invoicing, and provide analytics on invoice status.
Ultimately, the way a liquor management platform helps solve this issue is data. Analytics provides insights into stock levels (helping to reduce overstocking and out-of-stock issues). This data provides alerts in to low stock and helps with demand forecasting.
The good news: Today’s platforms are user friendly. You don’t have to be a tech whiz to perform these essential tasks.
Benefits of Using Liquor Inventory Management Software
Here’s a short summary of the key benefits of liquor inventory systems:
- Real-time Inventory Tracking: Provides accurate and up-to-date information on stock levels.
- Optimized Inventory Levels: Helps prevent overstocking and understocking.
- Efficient Reordering: Automatically generates purchase orders when stock reaches predefined levels.
- Loss Prevention: Detects discrepancies and potential theft, enhancing security.
- Sales Analysis: Offers data for sales trends, identifying top-selling products and improving profitability.
Ultimately, the right solution will help you increase liquor and wine sales for your business.
Real-World Example: Inventory Management Software in a Wine Shop
Here’s an example of how this type of system could help a liquor store owner:
Let’s say, a liquor store has expanded its selection of wines, and now carries nearly 500 different wines, spanning numerous varietals and brands. However, the owner hasn’t implemented an inventory management system.
These are some of the inefficiencies this business could face:
The manager consistently orders large quantities of a particular wine brand based on a few instances of seasonal demand. However, the wine doesn’t sell as quickly as expected.
- Issue: The excess wine inventory takes up valuable shelf space and ties up capital. The wine may be more vulnerable to spoilage, as well.
- Solution: Using historical sales and inventory data, the owner could better forecast demand. This would offer insights into seasonality for a particular brand or category of wine.
In contrast, the owner underestimates the demand for a popular variety of wine, and as a result, frequently runs out of stock.
- Issue: Liquor, wine and beer shoppers are very brand loyal. Therefore, when their favorite brands are out of stock, the store will miss out on sales. This can have a significant impact on sales.
- Solution: The most advanced liquor store inventory management systems include automated demand forecasting, which can help you better optimize inventory.
3. Human Error
With inventory management software, the owner relies on manual counts and spreadsheets to keep track of wine in stock. However, a manual error during inventory counts results in inaccurate data.
- Issue: The owner can’t trust the data, and as a result, cannot properly optimize inventory. This results in issues like out-of-stock items or overstocking, locking cash up in liquor inventory that’s not moving.
- Solution: Combining real-time data (from POS transactions and initial counts) and manual count data compiled with POS-connected handheld scanners results in more accurate, daily inventory data.
Software offers clear benefits, including operational efficiency, improved sales, and improvements in inventory efficiency.
5 Strategies for Improving Inventory Efficiency in a Liquor Store
In general, liquor stores should aim for a high turnover rate. A high turnover rate is a strong indicator of a liquor store’s inventory efficiency. This means sales are steady, and wine, liquor and beer don’t stay on the shelf too long before selling.
Here are some key strategies you can use to improve your liquor store’s inventory efficiency with POS and inventory management software:
1. Use Data to Improve Inventory Decisions
Inventory data is a powerful tool for improving efficiency. A few key insights from inventory and POS analytics data that can help you improve inventory efficiency include:
- Check your inventory data to identify top sellers and slow-moving stock.
- Use customer loyalty data to determine customer preferences. And make sure stock levels match customer preferences.
- Use year-over-year data to forecast demand, especially around holidays like the Fourth of July, Christmas, Thanksgiving, and Halloween.
- Identity top-selling categories.
These insights will help you get started, but there are many more, including inventory turnover, lead times, and stockouts.
2. Use Marketing Integrations
POS systems include add-on tools that can help improve your inventory turnover rates. A few key tools would include:
- Loyalty Programs – Integrate POS loyalty tools and engage your customers with promotional pricing, email, text and push marketing to build stronger relationships with customers.
- Digital Signage – Digital signage in a liquor store helps you promote new products, special offers, or drive customer sign-ups for your loyalty program. Signage can be managed through your back office tools.
- Upselling Features – Many POS systems include Upselling systems. This allows you to add upsell triggers into your POS to drive sales with bundled products or special offers. You can also engage employees with upsell incentives.
- Age Verification – Age verification tools help liquor stores stay compliant and ensure their customers are of legal age.
3. Inventory Management Automation
Inventory data is valuable, but a strong reordering system needs to be built around this data to ensure optimal stock levels. A POS inventory system helps you automate and streamline your reordering process by:
- Set Reorder Points – You can add reorder thresholds in your system. When inventory reaches this level, an order can be automatically placed with a supplier.
- Low Stock Alerts – Get informed about low stock levels and compile reports of stock levels that meet thresholds.
- Invoicing Automation – Automatically send and track the status of invoices with distributors and suppliers.
- Supplier Relations – Use CRM tools to manage your suppliers within your inventory database. This allows you to quickly look up distributors’ contact information and stay connected.
4. Leverage Demand Forecasting Automation
Demand forecasting involves number crunching, and it’s a challenge to predict, especially with changes in customer buying patterns throughout the year.
For example, a certain specialty beverage may have been introduced in summer and grown in popularity. Determining how much you will need for the holidays can be hard, especially without historical data.
Machine learning based tools can help you perfect demand forecasting. Many POS systems include demand forecasting models that are based on sales data. These models can help you better predict demand and optimize your inventory levels.
5. Conduct Regular Audits
A POS-integrated inventory system will provide you with more accurate inventory data. However, regular audits are still essential. One option would be to use handheld scanners. These devices scan inventory and then sync the data with your database in real-time.
This helps prevent manual errors and it can greatly improve inventory processes. Every store will have different inventory protocols. However, here are some systems that might work for you:
- Monthly: Many liquor stores conduct manual counts on a monthly basis. This frequency strikes a balance between the need for accurate inventory data and the practicality of the task. This is common for medium-sized stores.
- Quarterly: Larger liquor stores or those with more complex inventory management systems may opt for quarterly counts. This approach reduces the frequency of manual labor while still providing a reasonable level of control over inventory.
- Seasonal: Some liquor stores, especially those in seasonal tourist areas or with highly seasonal sales patterns, may choose to conduct manual inventory counts at the beginning and end of each season. This aligns with changes in product offerings and demand.
- Event-Driven: If your liquor store hosts special events or promotions that significantly impact inventory, consider conducting manual counts before and after these events to ensure accurate stock levels. This will also help you understand the business impact of these events.
Checklist: Selecting the Right Inventory Software
The best software platform depends on your operation, its size, and what you’re hoping to accomplish. For example, a single small-to-mid-sized store will have different requirements than larger multi-store chains.
However, no matter the type of software you need, you should be looking for these core features:
1. Ability to Record Large Databases
Liquor stores stock hundreds or thousands of products and SKUs. Therefore, you should make sure the system is built to manage large datasets.
2. Ease of Implementation
Ensure your liquor inventory software can easily integrate with your existing applications and business software. Ask providers if they offer support for migrating your existing database onto their platform.
3. Multi-Store Management
Multi-store inventory management is complex. A basic system often won’t have the capabilities to handle the complexity. Therefore, look for a system that scales for multi-store locations and chains with large warehouses.
Note: FTx POS is a preferred provider for multi-store businesses in age-restricted industries like liquor, tobacco and CBD.
4. Access from Multiple Devices
Inventory management software should provide you with the flexibility to operate from anywhere! Multiple-device access allows you to conduct your inventory checks, generate reports, or even calculate sales at your comfort.
5. 24/7 Support
Choose a provider that offers comprehensive support. This should include phone-based and remote support to help you resolve issues quickly.
The Best Liquor Store Inventory Platform: FTx POS
FTx POS was built to serve businesses in age-restricted industries and multiple-store locations. Today, we serve a variety of retailers in various industries, and we’ve built robust inventory management tools that can help business leaders succeed.
Key benefits of our POS-integrated inventory tools include:
- A simple and user-friendly interface
- Effective tracking and monitoring of liquor stock
- Provides seamless integrations (e.g. loyalty, digital signage, age verification, etc.)
- Tracks business trends, previous orders, and customer preferences
- Provide customized features per business needs (such as mass updates, employee incentive programs, etc.)
- Detailed and accurate reporting tools
FTx POS is a leader in the liquor software market. Let us help your business grow. Contact us today to learn more about our POS platform. POS plans include basic inventory features; but we offer add-on inventory features for larger operations.
>> Need some help finding a solution? These are the best liquor store POS systems with inventory features.
FAQs: Liquor Management Systems
You can expect reduced costs, minimized theft, optimized stock levels, improved order accuracy, and better decision-making based on data analytics.
Consider factors like store size, budget, scalability, ease of use, and compatibility with existing systems. Request demos and references from providers.
Most IMS solutions are customizable and can accommodate various liquor types, brands, and bottle sizes. One option: Choose a POS system that includes barcode scanning and printing. This will help you customize labels and printing for your products.
A cloud-based POS is a powerful tool that can scale with your business. Cloud systems essentially put your inventory data on a secure web-based platform. You can access this data from anywhere, and it’s especially helpful for multi-store locations.
With a cloud-based system, yes, you can access your data remotely. FTx POS provides access to back office tools through a secure web or app-based portal.
Costs vary depending on features and scale. With FTx POS, our basic inventory tools are included with our basic POS subscription costs. However, for large liquor distributors with multiple locations and large warehouses, inventory management costs are determined for the business needs.
Implementation timelines depend on your store’s complexity. These systems can be implemented in a few days to a few weeks. With FTx POS, we can help migrate your existing database and get up and running faster.
Yes. Most providers offer technical support. FTx POS offers 24/7 support for customers, and we’re accessible by phone and chat to help you resolve issues quickly.
POS tools help you maintain accurate records, facilitate age verification, and assist in compliance audits, ensuring you meet legal obligations.
Yes. FTx POS prioritizes data security with encryption, user authentication, and regular backups to protect your sensitive data.