Marketing Essentials

1. Marketing Essentials nChapter 24 Stock Handling and Inventory Control Section 24.1 The Stock Handling Process

2. SECTION 24.1 The Stock Handling Process What You'll Learn • The need for a stock-handling process • How merchandise is received and checked • The methods and procedures used to mark merchandise • The procedures used for transferring merchandise

3. SECTION 24.1 The Stock Handling Process Why It's Important • To be successful, businesses must have systems in place to handle and organize their stock. This helps control costs and ensure that operations can continue without interruption.

4. SECTION 24.1 The Stock Handling Process Key Terms • receiving record • blind check method • direct check method • spot check method • quality check • source marking • preretailing marking methods

5. SECTION 24.1 The Stock Handling Process Stock Handling • Manufacturers and suppliers receive parts or raw materials for use in making finished products. These items must be tracked just as retailers track the merchandise they receive. The steps in the stock handling process include: • receiving goods • checking goods • marking the goods with information • delivering them to their selling location

6. SECTION 24.1 The Stock Handling Process Receiving Merchandise • Merchandise ordered by a store is received, checked, and marked with a selling price before it is transferred to the sales area. • The area where deliveries are made by carriers is called a dock, and is large enough to accommodate the shipments a business normally receives.

7. SECTION 24.1 The Stock Handling Process Receiving Records • A receiving record is a form that describes the goods received by a business. • Some businesses use a short type of receiving record called an apron, a form attached to the invoice before the merchandise moves through checking and marking.

8. SECTION 24.1 The Stock Handling Process Checking Merchandise • Merchandise must be checked to verify quantity and condition once it is received. In some businesses employees called receivers inspect and record newly arrived merchandise. The four methods often used to check merchandise are: • blind check • direct check • spot check • quality check Slide 1 of 5

9. SECTION 24.1 The Stock Handling Process Checking Merchandise • Blind Check Method The receiver writes the description of the merchandise and quantities received on a dummy invoice, then compares it to the actual invoice. It is accurate, but time consuming. Slide 2 of 5

10. SECTION 24.1 The Stock Handling Process Checking Merchandise Direct Check Method Merchandise is checked directly against the actual invoice or purchase order. This is faster but errors may not be found if the invoice itself is incorrect. Some receivers estimate counts, rather than actually counting every box. Slide 3 of 5

11. SECTION 24.1 The Stock Handling Process Checking Merchandise Spot Check Method A random check of one carton in a shipment. If the contents are as stated on the invoice, the remaining cartons are assumed to be the same. Often used for canned goods and paper products. Slide 4 of 5

12. SECTION 24.1 The Stock Handling Process Checking Merchandise Quality Check Method A check to determine if the quality of the goods received matches the quality of the products ordered. This type of check is often done by the buyer. Slide 5 of 5

13. SECTION 24.1 The Stock Handling Process Returning Merchandise • There are several reasons a business might return merchandise to a manufacturer: • incorrect items were sent • items were damaged • items received were not ordered • order was cancelled after it was shipped • When merchandise is returned, the seller issues a credit memorandum that notifies the buyer that the buyer's account has been credited.

14. SECTION 24.1 The Stock Handling Process Marking Merchandise After it has been received and checked, merchandise must be marked with the selling price and other information. The most common method of marking price is with a Universal Product Code (UPC), a group of parallel vertical bars and a row of numbers on a label. Slide 1 of 3

15. SECTION 24.1 The Stock Handling Process Marking Merchandise • With source marking the UPC and price is marked by the manufacturer before the product is sent to the retailer. • With the preretailing markingmethod, pricing information is marked on the purchase order and merchandise can be priced as soon as it arrives. • Merchandise can be marked with manual pricing machines or with price tickets. Slide 2 of 3

16. SECTION 24.1 The Stock Handling Process Marking Merchandise • Price Ticket Information Price marking on the price ticket identifies the price, but the ticket can also include the store number, model or style number, color, sizes, fabrics, etc. This information is helpful in tracking merchandise. Slide 3 of 3

17. SECTION 24.1 The Stock Handling Process Transferring Merchandise • Once merchandise is received, checked, and marked, it is ready to be moved to the sales area. Stock is generally transferred to and from a warehouse at the beginning of each season. • Transferred merchandise is accompanied by a form describing the items, style numbers, colors, sizes, cost, and retail prices.

18. ASSESSMENT 24.1 Reviewing Key Terms and Concepts • 1. Describe the stock handling process. • 2. What is the purpose of a receiving record? • 3. What are the four methods used for checking merchandise? • 4. Explain two methods used for marking merchandise. • 5. What are some reasons for transferring merchandise between various store departments?

19. ASSESSMENT 24.1 Thinking Critically • Retailers often code their actual cost of merchandise on price tickets. Do you think this information should be kept from customers? Why or why not?

20. Marketing Essentials End of Section 24.1