Inventory Best Practices
Successfully managing your inventory can be a challenging task, as it requires time and effort to keep your redemption area running smoothly. Inventory management is only one piece of the redemption puzzle but the tools and resources Redemption Plus provides can help make this process less daunting.
The inventory systems in your FEC are only as good as your data. In your redemption area, this information is going to be stored on your Point of Sale (POS) software. Redemption Plus provides a Digital Packing List (DPL) with each order which is compatible with all software vendors in the market. The DPL contains all of the vital information necessary to add product count to your inventory. This includes:
- 👉the price
- 👉the ticket value
- 👉the quantity ordered
- 👉the unit of measure
Inventory management really starts with uploading the DPL after each order.
This ensures that your POS data is current and up to date based on your order history. The DPL file is automatically emailed to you once your order has shipped. Your DPLs are also available for download on our website. Our staff has created training videos that outline the DPL upload process, reach out to your Account Manager for more information if needed.
Along with uploading the DPL, take some time to check in each order when you receive it. Confirm the contents of your order against the packing slip. If there are missing or damaged items, reach out to us immediately and we will help rectify any issues. In the case of missing or damaged items, you will want to update the inventory count in your POS software to keep accurate data. The DPL does not know that you received a different quantity so updating that inventory count as soon as possible is vital.
Now that the DPL has been uploaded and the order has been checked for accuracy, you can sit back and relax, right? Not quite. Although a timely DPL upload is vital to inventory integrity, you also must consider the products scanned out when customers redeem their points. It is important that the correct item is scanned out of your inventory. As each item is scanned out, that data is reflected in your POS system. If the wrong item is scanned, it is going to impact your inventory negatively and cause more work down the road to rectify. If you find that a barcode is not working correctly, reach out to your Account Manager to help.
No matter how well your systems are managed, there is still a need for a physical inventory count to keep data accurate. Mistakes happen and shrinkage must be accounted for as well.
Shrinkage is the difference between your recorded inventory levels and your actual on-hand inventory.
This discrepancy may occur when items are damaged, miscounted, or stolen. Typically, you can expect 1–2% as an acceptable amount. If you find that your shrinkage percentage is higher than that, there may be other issues to address. We recommend that you perform a physical inventory at least once per month. By performing frequent inventory counts, you will be able to recognize recurring issues or uncover larger more impactful concerns. To help speed up the inventory process, employ tools such as our Bin Weight Calculator which allows you to weigh small bin prizes rather than counting individual items. The Bin Weight Calculator can be found in our Operational Toolkit.
There are many tasks involved with Inventory Management and keeping everything straight can be difficult, especially during the busy seasons. One way to help automate and identify inventory issues is by utilizing our Rapid Reorder program. Rapid Reorder will connect to your POS software to monitor what products have been scanned out weekly.
The software will create a cart on our website each Monday morning based on what was scanned out the previous week. It will utilize Periodic Automatic Replacement (PAR) levels to keep a desired minimum quantity on hand. What is a PAR level, you ask?
A PAR level is set by determining the minimum quantity needed to fill your display plus safety stock.
A PAR level should be set for every item in your redemption center. Our team can provide suggested PAR values and you can make adjustments as needed. We will not ship your order automatically, but the creation of the cart will save you time and you can adjust the cart as needed before checking out.
Inventory Management is a vital part of keeping your redemption area running smoothly and plays a pivotal role in keeping your Cost of Goods Sold (COGS) within an acceptable range. The industry standard is typically 18–22%, but every business is different. To calculate COGS, divide the dollar amount sold out of redemption by the dollar amount brought in by your games.
If your inventory is a complete mess, your data including your COGS calculations will be a mess as well.
By keeping your inventory clean and up to date you can be confident in your data and calculations. This also gives you the opportunity to use the plethora of reports available within your POS software to help keep your redemption area in the best shape possible.
Written by: Paula Shavers
Want some more tips on managing inventory? We interviewed 3 operators to get their hot takes on how they are successfully managing inventory in their centers! Check it out below.
Chris Martin:
“Efficient inventory management is the backbone of any successful business operation. Proper training is key to making your inventory counting and overall management run smoothly. This not only prevents overstocking or stockouts but also minimizes the risk of financial losses. When it comes to inventory management labeling your shelves helps with organization and training. The inventory training should include how to properly count by using the shelf-to-sheet method. This method helps ensure that product is not missed during the count. When I do my training having shelf labels helps the team members follow the flow of the inventory. We usually use our strong hourly team members and managers to complete inventory. We count every two weeks to help ensure accuracy.” — Chris Martin: Senior Amusement Manager — Andretti Indoor Karting and Games, The Colony
Abbey Brenneman:
“Managing inventory in an arcade can be overwhelming, but effective organization is a game-changer. Start by organizing wall displays and bins in a systematic layout, creating a visual guide for both staff and management. If your storage area allows, mirror the wall/bin layout in your storage room to maintain consistency. This not only streamlines the process but also saves time during day-to-day operations and inventory checks.
Train your team to follow a strict rule: always put items back in their designated spots. Consistency in placement reduces the chances of items being misplaced, making it easier for everyone to locate things promptly. Consider labeling shelves for added clarity, ensuring that every team member understands the designated spaces for different items. This organizational approach not only enhances efficiency in running the arcade but also contributes significantly to a smoother inventory management experience.” — Abbey Brenneman: Pizza Ranch Owner/Fun Zone Manager
Tyler Johnson:
“It has been a journey finding out what works best for our business when it comes to consistent inventory management. The biggest issue that we’ve had is understanding that the same system does not work for everyone, and it was important to capitalize on what we are doing well, as well as understanding where we struggle and working around that.
For example, our main struggle when it comes to inventory is our amount of backstock is too much for a single person to count on a single shift. This led to trying to find a day and time where my team could come into conduct a full inventory, which proved to be a struggle within itself due to different schedules. So, I considered the aspects that we shine in, which is an extremely organized store and stockroom and a hardworking team. Taking these into account, we have been trying a solution which includes scheduling a team member to conduct inventory for one section a week. This way we won’t be overwhelmed by the sheer amount of product that we have, and team members are able to be scheduled within their preferred availability.
So far, there have been a few bumps in the road with winter break, holidays, and vacation time. However, with our current method, it’s nice to know that wherever we must pause, we can easily pick up the following week.” — Tyler Johnson: Operations Manager — Wild Island
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