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Is Your Inventory Draining Your Profits? Here’s How Smarter Retailers Are Turning Stock into Cash

29 April 2025

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Data-Driven Decisions | Footwear | inventory management | Retail | Small Business

If you’ve ever felt the sting of packed storerooms, sluggish cash flow, or buying panic when the economy wobbles, you’re not alone. Independent retailers everywhere are wrestling with inventory headaches—and often missing the real reason their margins are shrinking.

But what if the answer isn’t just in cutting expenses, but in how you plan, review, and invest in your inventory?

In the latest episode of The Footwear Retailer Podcast, Pete Mohr sat down with Dane Cohen of Management One to unpack what’s really driving cash flow challenges—and what separates inventory masters from the rest.

Let’s dig in.

The Costliest Mistake: Dead Stock, Not Payroll

When times get tough, most retailers make the same move: slash payroll, delay new buys, and hope to ride out the storm. But as Dane explains, the biggest threat isn’t on your schedule—it’s hiding in your back room.

Inventory is your largest cash expense—often 50% or more of your spending. If you’re not moving product, your profits are getting buried under dead stock. Dane warns that focusing only on expenses is like patching a leak while ignoring the flood.

Key takeaway:
Stop seeing payroll as the problem. Your real opportunity is in better inventory planning, not in cutting the people who create your store’s experience.

Data Over Drama: The Rhythm of Review

Dane breaks down a common pitfall: waiting until year-end to assess your inventory and cash flow. By then, it’s too late to react.

His advice?

  • Establish a weekly (or biweekly) review rhythm. Look at 10 key data points every Monday—like aged stock, sales by category, and inventory-to-sales ratios.

  • Don’t just rely on last year’s numbers. Benchmark against your potential, not your past. That means planning for what’s possible if you invest where your store is actually winning, not just repeating what’s familiar.

  • Use open-to-buy planning to project cash flow and align future orders with your actual opportunity—not just your hopes or habits.

Action step:
If you haven’t looked at your average inventory on hand, or if you can’t name your top and slowest sellers, start tracking them now. You can’t fix what you aren’t measuring.

Don’t Underbuy Out of Fear—Invest Where It Counts

One of the episode’s biggest takeaways: Pulling back on buying out of uncertainty is the fastest way to depress sales.Dane sees it all the time—stores get nervous, cut budgets, and then wonder why sales slump even further.

Instead:

  • Double down on what’s working. Use your data to spot top performers and invest in those categories.

  • Clear out the old. Don’t let aged stock pile up. Mark down, promote, and move it out to free up cash for newness.

  • Build true vendor partnerships. Share your data and trends with your reps—don’t just take what’s offered. The better your data, the more power you have in negotiations and planning.

Adapt or Get Left Behind

The retail landscape is shifting—fast. Dane points to examples from athletic to menswear: stores that failed to adapt to new trends or products found themselves losing relevance. Those that embraced “what’s next” (like the rise of HOKA or athleisure) saw outsized returns.

What to do:

  • Stay curious. Try new brands, categories, or local vendors.

  • Align your product assortment with what your customers actually want—not just what you’ve always carried.

The Three Things to Do This Quarter

Dane wraps the episode with three concrete priorities for every retailer:

  1. Know your aged inventory. What’s collecting dust? Move it out—fast.

  2. Track what’s growing. Use receiving and sales data from the last 90 days to see where your business is headed.

  3. Invest in support. Don’t go it alone—whether it’s hiring outside help or adopting new tools, now’s the time to bring in expertise to help you plan smarter.

Final Thoughts: Smart Inventory Management Is About Buying Smarter, Not More or Less

Don’t let another season pass with cash tied up in the wrong places.

  • Review your data weekly.

  • Clear dead stock ruthlessly.

  • Invest in winners and share your numbers with your partners.

  • Stay nimble—and stay profitable.

Ready to stop guessing and start mastering your inventory?

🎧 Listen to “Mastering Inventory” with Dane Cohen now!
Learn more about Management One: management-one.com | @m1retailexperts

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