Self-scan Inventory Part 3: Is it Really Worth Your Money?

A typical Target retail store. The company hires an inventory service to count merchandise. 

This is the last part of this 3-part series on self-scan inventory:

• Self-Scan Inventory Part 1: What is it?
• Self-Scan Inventory Part 2: Who are they and what benefits they offer?
• Self-Scan Inventory Part 3: Is it really worth your money?

In my previous posts (please refer the series listed above), I already have covered much of the topics I wanted to discuss. Now, I will give a short comparative table in terms of expenses, and advantages between self-scan inventory vs. hiring a professional inventory service. The goal of this post is for you to decide which is more appropriate to your retail business.

Consider the following data:

• Store Name:                                          (withheld)
• Number of Employees:                          8 including Store Manager
• Approximate number of Merchandise:    35,000
• Nature of Business:                                Retail, Ladies' Bags and Accessories
• Scan Mode:                                          Auto Scan, UPC Integrity, Verify 20%

A comparison chart between self-scan inventory and hiring a professional service
Self-Scan Inventory Required to rent inventory equipment with at least 9 scanners. The extra scanner is needed just in case a unit malfunctions. Weekly rental rate starts at $1,500 Equipment Rental Cost Using Daily Rate: $990.00 If you close your store for the inventory, estimate the potential net profit loss for the day. Here, I will provide a conservative estimate: $2,000 If you plan the inventory prior or after store hours, all staff must be present and therefore overtime hrs may require. Use time and a half to pay overtime hours spent. Estimated hours spent based on 8-hour inventory time at an average of $10.00/hr OR $15.00/hr including overtime: $840.00 You may also include expenses such as food/snacks for your staff when the inventory goes beyond wee hours. When you open your store the next morning, don't be surprised when some of your staff looked so tired. Some won't show up, and some will call and sick. If you plan the inventory while the store is open, you can only maximize half of your employees since the other half will focus on sales and customer service. You will spend twice the time for inventory due to staff limitation. If you intend to ask help from the closest store (if it happened to have one) in your area, the other store will be short-staffed as well. Who will train you and your staff for the inventory? Remember, you only rented the equipment. Estimate time spent for familiarizing the equipment, procedures, actual training and exercise. Estimated time to spend: 30 minutes-45 minutes. It is estimated that store staff count 30% bit slower than professional inventory crew. The average auto scan speed for a professional inventory member is 800 auto scans per hour. The average auto scan speed for regular store employee is 560 auto scans per hour.  If your store has an estimated 35,000 pcs. of merchandise, it takes about: 9 hours to complete the inventory using your employees. If you split your staff into 50/50, you will spend 18 straight hours of inventory time, not including lunches and breaks! When you split, adjust and recompute your Equipment Rental Cost from daily to weekly rates.   6 hours to complete the inventory using professional inventory crew. You have the option to hire a dedicated trainer-internal auditor to train and assist employees for all inventories if your corporate requires it.		Hiring A Pro No equipment rental. You can always open your store while the inventory is ongoing which means no profit will be lost. Fixed Inventory Fee. Only ask a flat rate even if inventory may extend. Inventory service may even be penalized for going beyond the agreed duration time. No overtime pay for employees. Your employees can focus more on customer service. No training of staff needed. No hardware-software hassles. No troubleshooting of equipment. Inventory done in due time. Saved 30% more on time and effort. Inventory crew is done while your staff is 3 more hours to go counting. You don't have to worry where to get staffing.  You get well-trained inventory crew, and experienced inventory service  You save energy, time, avoid unnecessary inconveniences associated to a stressful physical inventory.
Estimated Cost: From $1,830 - $4,000		Estimated Cost: Flat Rate: $2,100

All data are for informational purposes only. Should you have any question, it is always best to discuss it with your company or with the inventory professional of your choice. The author shall not be responsible for any damage(s) arising directly and indirectly as a result of misuse or abuse of information herein.

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