Perform Stock Control Procedures - Information
Contents
Page Number
Receive and Process Incoming Goods
The Receiving Bay
Checking Stock
Calculating Stock Price
Rotate stock
Rotating Stock
Excess Stock
Safe Lifting techniques
Stock Control Manual
Participate in stocktake
Preventing discrepancies at stocktake
Electronic stock recording equipment
Preparation for stocktake
2
9
12
Reorder stock
4
Completing a dispatch
6
Key Terms and Concepts
Complete the table
8
1
Perform Stock Control Procedures
Introduction
This unit involves the handling of stock in a retail environment. It encompasses the receiving of stock,
processing incoming stock, rotating stock, participating in stocktakes, reordering stock and dispatching
goods.
Critical aspects of assessment
Evidence of the following knowledge and skills is considered essential to demonstrate competency in this
unit:
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consistently applying store policies and procedures, industry codes of practice, relevant legislation
and statutory requirements in regard to stock control
consistently applying safe work practices in the manual handling and moving of stock according to
occupational health and safety legislation/regulations/codes of practice
interpreting and applying manufacturers’ instructions with regard to handling stock and using
relevant equipment
receiving and processing incoming goods and dispatching outgoing goods according to store
policies and procedures
rotating and reordering stock and maintaining stock levels according to store policies and
procedures
assisting with stocktaking and cyclical counts according to store policies and procedures
interpreting and processing information accurately and responsibly.
2
Receiving and Processing Incoming Goods
Goods that arrive at the store need to be received and processed correctly.
Receiving goods involves checking that the number of cartons delivered corresponds with the delivery
docket. Processing involves unpacking the goods, checking and validating them, and then dispatching them
to the right area or department.
When working in the retail industry, you need to know how to process goods that are delivered to your store.
Refer to MegaMax's Stock Control Manual. This manual describes the policies and procedures for receiving and
processing delivered goods.
The receiving bay
Stock that arrives at your store comes to the receiving bay. The receiving bay at a department store like
MegaMax is the delivery dock at the back of the store where trucks pull in to unload cartons. A small store
like MaxSurf may not have a delivery dock. Instead, the goods are received in the reserve at the shop.
The receiving bay must be kept clean and orderly so that stock can be brought in and processed quickly
and efficiently.
Stock receiving area
The area where goods are delivered to a retail store is generally referred to as the dock. It can also be
referred to as the delivery bay, the delivery dock, the loading dock or bay. Regardless of the term used, and
even if it is only a small space on the floor, this area should be kept clean and tidy as much as possible.
There are a number of reasons for this:
Unpacking stock safely
Stock that has been delivered must be unpacked safely and the packaging disposed of appropriately,
according to your store's procedures. The procedures for doing this can be found in your workplace
manual.
Safety (OH&S)
 Boxes, cartons, packing materials, trolleys and other obstructions are trip hazards.
 Keeping the stock receiving area clean helps prevent goods becoming soiled (dirty) and stops staff
becoming dirty. Dirty staff and dusty, grubby looking goods on the shelves look bad and create a
negative impression for the customers.
 A tidy receiving area means that when goods are delivered they can be easily identified, mistakes
will be minimised and checking the deliveries is made easier.
 Shelving should be kept tidy so that goods can be placed directly on them. Goods and cartons
should not protrude where they can be knocked over or damaged.
 If accidents occur, spills should be cleaned up straight away so that staff do not slip on them or walk
the liquid into other parts of the store.
 Equipment such as pallet jacks and trolleys should be stored safely when not in use.
Security
 The delivery area door should always be kept locked when not in use to prevent unauthorised entry
and the possibility of theft.
 All cartons should be checked for goods, flattened and disposed of as soon as possible to prevent
waste and theft.
3
Checking stock
When a delivery arrives, the driver will present a delivery docket with the goods. The retailer needs to
check that the store and address on the delivery docket are correct. Then the number of cartons received
must correspond with the number of cartons on the delivery docket. The retailer also counts the cartons
before signing for the delivery.
The next step is to confirm that these goods were actually ordered and that every item ordered has been
delivered. The store sends a purchase order to order the goods and the supplier sends an invoice with the
delivery. The invoice lists every item in the delivery.
Goods that have been unpacked need to be checked against the purchase order and invoice. If the
information in the purchase order matches the information in the invoice, the store can pay the supplier. If
not, then the store needs to withhold payment and inform the supplier.
Sample purchase order
A purchase order is sent by the retailer to the supplier to order goods.
Store address
to confirm who
is making the
order
Cronulla Surf Design
Surf Road, Cronulla, 2230
9523 3030
Purchase Order
From: CSD
To Supplier: Rip Curl
Bells Rd
Torquay, 3033
Description of Goods
Black Hooded Jumper
Size 10
Black Hooded Jumper
Size 12
Black Hooded Jumper
Size 14
Order No. 889
A clear description
of goods, codes,
quantity, unit price
and total price.
The suppliers
name and address
Codes
B3265
Quantity
10
Unit Price
$35
Total
$350
B3265
8
$35
$280
B3265
10
$35
$350
Subtotal
$980
10% Store Discount -$98
Total
$882
Order by: Mark
Authorised by Manager: Lauren
Names to
confirm who is
ordering the
goods and
authorisation
Discount given
to stores who
place larger
orders
4
Recording stock levels
When goods have been delivered, checked and received, they need to be recorded so that the store can
maintain accurate figures of the stock levels.
Stores will either record these stock levels electronically or in a stock book
You will record the goods that have been delivered and checked on this store stock system chart.
Calculating the selling price
After you have recorded new stock in the store stock system chart, you need it priced so it can be put out on
the shelves to be sold. Each store will have its own pricing policy.
The Selling Price of a product is determined by adding the Markup to the Cost Price of the product. You
may have to add the Goods and Services Tax if this tax applies to the product.
The Cost Price includes:
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the cost of the goods
less any discounts from the supplier
plus freight charges.
Markup includes:


a percentage of your store's operating costs
plus a profit.
The Goods and Services Tax (GST) is collected by retail stores on behalf of the government. The GST is 10%
of the selling price. It is added to many goods to determine the final Selling Price that goes on the ticket.
GST is added to most retail goods but excludes basic foods, some over the counter medicine and some
public health goods.
Here is the procedure to use when calculating the Selling Price of a product:
1. Start with the Cost Price of the product.
2. Add the dollar value of the Markup.
3. Then add the GST to get the Selling Price.
Note: GST does not apply to all goods, so you may not have to add the GST to all products to calculate the
Selling Price.
The following exercise shows you how to calculate the Selling Price of merchandise based on the Cost
Price, Markup and GST.
5
An example of calculating selling price
We've just processed a delivery of video cassettes. This is how you calculate the Selling Price for this item.
Let's start with the Cost Price.
Cost Price:
$2.50 each
Then we have to calculate the Markup value to add to the Cost Price. The Markup for video cassettes is
50%. This means that we take 50% of the Cost Price, and add it to the Cost Price again.
Cost Price:
$2.50 each
Calculate Markup value: 50% of $2.50 is $1.25
Add $1.25 to $2.50 to get $3.75
Finally, we add the 10% GST to get the final Selling Price.
Cost Price:
$2.50 each
Calculate Markup 50% of $2.50 is $1.25
value:
Add $1.25 to $2.50 to get $3.75
Add GST
10% of $3.75 is $0.37
Add $0.37 to $3.75 to get $4.12.
This is the final Selling Price of the video cassettes. This may then be
adjusted to $4.00 or $4.25 to fit in to the store's pricing policy.
Calculating the markup percentage
Sometimes, you may be required to calculate the Markup percentage from the cost price and the selling
price.
If GST is added to these goods you'll need to divide the selling price by eleven before using the formula.
This will give you the selling price before GST was added.
Here is the formula you would use:
Selling Price - Cost Price x 100 = Markup %
Cost Price
Applying price labels to stock
After the final price has been calculated, you'll need to label the merchandise.
Some stores have an individual price ticket for each item. Other stores use barcodes on the merchandise so
that the price is displayed on the shelf ticket.
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Storing and retrieving stored goods
Once the goods have been priced and ticketed they will need to be put on the floor for selling, or stored in
an appropriate place.
If the goods are stored in a reserve, they will need to be retrieved easily when required.
These things need to be considered when storing goods:
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Easy access by sales staff.
Occupational Health and Safety issues.
The amount of room available.
These issues will vary depending on the type and size of the retail store
Using a requisition form
In a large store like MegaMax, staff must complete a Requisition Form before stock is dispatched from the
reserve to the department. This will ensure that:
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stock is accounted for at all times to avoid theft
the goods are dispatched to the correct department
accurate stock figures are provided.
Here is a sample Requisition Form if you would like to examine one.
Cronulla Surf Design
Surf Road, Cronulla, 2230
9523 3030
Name of
department
requesting
stock
Requisition Form
Time day
and date
the stock is
required
Department : Clothes
Due in Department: 9am Wednesday Morning
Description
Description
Black Hooded Jumperof stock to
be delivered
Size 10
Black Hooded Jumper
Size 12
Black Hooded Jumper
Size 14
Requested by: Mark
Code
B3265
B3265
The code
for the item
that is to be
delivered
B3265
Quantity
10
8
10
Name of person
requesting stock
7
The
amount of
stock to be
delivered
Rotate Stock
When merchandise is sold from the fixtures, it needs to be replaced with stock from the reserve.
Customers can't buy merchandise from the reserve, so the fixtures must be filled regularly.
Stock rotation means that older stock is displayed for sale before the newer stock. This ensures that the
store always has clean, fresh merchandise to sell and therefore maintains an appealing image to
customers.
Performance criteria for rotate stock
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Carry out stock rotation procedures for merchandise and wrapping and packing materials
routinely and accurately according to store policy.
Place excess stock in storage or dispose of in accordance with store policy.
Maintain safe lifting and carrying techniques in line with store occupational health and
safety policy and government legislation.
Stock rotation scenario
This scenario is set in MegaMax. By working through the scenario, you will find out how stock rotation
works.
It's 2 pm. You've had a busy morning tending to customers. Then, you receive a call from your supervisor,
Janie, in the Cosmetic Department
Hello. Can you help me out here? This 'Body Sparkle' line seems to be very popular. We've almost sold out
of the stock on the fixtures. I need you to get more stock from reserve to fill this fixture.
You head to the reserves to get more 'Body Sparkle' to fill the fixture Here is the stock from the reserve that you
can use to fill in the fixture in the Cosmetic Department. Which carton would you choose?
Body Sparkle Delivered: 24 June
Body Sparkle Delivered: 17 April
Rotating stock
You take the carton marked Delivered: 17 April to Janie.
That's the correct way of doing stock rotation - the older stock is always put out on sale before newer
stock.
This is called FIFO, (First In First Out)
FIFO applies to all merchandise. Goods that have been sitting on fixtures for a while become dirty, tatty
and unsaleable, so you need to make sure that older goods gets sold before newer goods.
All merchandise should have date codes so staff can identify the oldest stock either in the reserve or on the
fixtures.
The FIFO principle also applies to wrapping and packing materials that you use in the store. Old, tatty
wrapping detracts from the store image. It also makes the goods within the wrapping appear aged and
unsaleable.
Now we need to put the stock on the fixture. The older stock that you took from the reserve is newer than the
stock already on the fixture. The stock that is already on the fixture should be sold first so you need to move all
the old stock to the front of the shelf then place the new stock behind the old stock.
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Dealing with excess stock
What do you think should happen to the excess stock that is kept to fill the fixtures that become empty in
the store?
Dealing with excess stock at MegaMax
What do you think should happen to the excess stock that is kept to fill the fixtures that become empty in
the store?
Here is a list of suggestions from the sales assistants at MegaMax about what to do with excess stock.
Decide if each suggestion is suitable or not.
Staff Member
Idea
Good Suggestion?
You can store small items like
Yes, this is the method used in some stores
scarves, pantyhose, cosmetics, etc.
where there are drawers and cupboards
in drawers or cupboards under the
under the fixtures
fixtures for easy access.
Put excess stock behind the point of
sale area, or counter, for easy
access.
This is not a good idea. The point of sale area
will very untidy and crowded with sales
assistants trying to serve customers and gain
access to stock.
Keep excess stock on the shelves in
the back reserve.
Yes, this is a good idea. This keeps the
reserve tidy and the goods are still accessible
when needed.
Stock in the reserves should be
labelled with prices, codes, dates,
and/or barcodes
This is a good idea. The stock is then ready to
use and staff can read the dates to see which
stock to take first.
You can send excess stock back to
the supplier until it is required
Linda's idea isn't a good one. The stock might
be needed soon and it is a waste of delivery
costs to send it back. If there was too much
stock delivered in the first place then the
ordering system needs to be reviewed
Yes, this is definitely a good idea. This is
important, as stores must not sell food that
has perished or become contaminated.
Store perishable goods according to
temperature requirements.
Using safe lifting and carrying techniques
Stock replacement is a daily activity in retail stores. It can involve lifting and carrying
merchandise. It's important that you use the correct manual handling techniques when lifting
and carrying to prevent injuries.
These manual handling techniques should be followed even for lifting and carrying stock that isn't large or
heavy. It's the technique that's important, not the size of the item.
Here are some tips for moving large items
1) Work with a partner
2) Use a trolley
3) Use machinery, like a conveyor belt, a hand-driven forklift, or a trolley jack, if it's available
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Stock Control Manual
! All employees must understand the procedures for stock control within MegaMax. These systems must be
followed to minimise the risk of loss of stock and to ensure that accurate company records are maintained.
1. Receiving Goods Into The Store
· All goods must be delivered to the receiving bay at the rear of the store.
· Deliveries will only be received one at a time, whether they are hand delivered or by transport. This will
ensure deliveries are not confused and will minimise the opportunity for vendor theft.
· The receiving bay must be clean and tidy at all times to ensure occupational health and safety standards are
met. This is a working area where staff must be able to work efficiently and operate equipment safely.
· The receiving officer must check the deliveries received before signing the delivery docket. Check for:
Ø Damaged cartons
Ø Goods that have been tampered with
Ø Possible interference with goods during delivery
Ø Incorrect name and address of store
· Correct manual handling techniques must be used (use the 10 Steps of Manual Handling outlined below). Staff
must either get assistance from another staff member when moving heavy stock or use the trolley. Only
authorised staff members may use the hand driven forklift.
· Goods must be stored appropriately as soon as they have been received.
10 Steps of Manual Handling
Always follow the 10 Steps of Manual Handling when lifting or moving stock.
1. Assess the load.
2. Get close to the load.
3. Set your feet apart for balance.
4. Relax your knees.
5. Lower your body and bend your knees.
6. Lower your head.
7. Get a firm grip.
8. Raise your head and look ahead.
9. Straighten your legs.
10. Lift, and then turn your feet before walking.
Unloading stock in the receiving bay
You will need to use special equipment in order to unload stock.
Trolley
Use a trolley to move small cartons.
Flat trolley
Use the flat trolley to move larger cartons.
Hand-driven forklift
The hand-driven forklift is used to move larger stock, such as those on palettes.
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2. Processing Of Incoming Goods
Goods will only be processed after the receiving officer has signed the delivery docket.
· Remove the goods from the packaging and place on the benches in the receiving bay. This is where the goods
can be counted and checked against the invoice.
· Use the safety knife to open all packaging. Remember to cut away from your body to prevent accidents. Don’t
use your hands or teeth to rip open cartons or bags.
· The packaging must be disposed of in the rubbish bin or the recycle bin, as appropriate. MegaMax has a policy
of recycling wherever possible.
· The cartons must be immediately crushed and placed in the compactor.
· Invoices must be checked thoroughly before goods are sent to the reserve or the department. Tick the correct
listings on the invoice or note changes that need to be addressed.
Check for:
Ø Correct name and address of store
Ø Correct merchandise has been delivered
Ø Correct quantities have been delivered
Ø Correct price has been charged
Ø Goods and Services Tax is correct
Ø Discounts are correct
Ø Freight charge has been added correctly
Ø All totals are correct
Ø Any incorrect, damaged or out-of-date stock
· Goods that are incorrect, damaged or out-of-date must be returned to the supplier. A completed claim form
must accompany the goods on dispatch.
· All goods must have a price ticket attached before they are stored in the reserve or department. Tickets must
be attached firmly and placed on the merchandise so they can be easily seen, in accordance with store policy.
· When the goods have been priced they can be stored immediately in the reserve, unless special requirements
apply. Each department has its own storage area within the reserve. Special storage requirements:
Ø All jewellery is stored in the department for security
reasons.
Ø Observe regulations for storage of hardware goods. Dry chlorine should not be stored near liquid or powder
chlorine. Nor should it be stored near oil, heat beads or firelighters. Wear gloves when handling chemicals. Store
in a well ventilated area.
Ø Fragile goods must be given adequate storage space to prevent breakages.
· Goods may only be sent to the department when a Requisition Form has been authorised from that
department. This Requisition Form must be recorded against the store stock system chart to ensure accurate
stock records are kept at all times.
Goods that have been received and ticketed must be recorded on the store stock system chart. This will ensure
that accurate stock records are kept at all times.
3. Stock Rotation
All employees must follow the FIFO system of stock rotation.
FIFO = First In First Out
That means the goods that are first into the store must also be the first to go out of the store with the customer.
Check all dates before you put stock onto the fixtures.
Customers can’t buy merchandise from the reserve, so the fixtures must
be filled regularly.
4. Stocktake Procedures
Stocktaking is usually done yearly and half-yearly as it is a legal taxation and
audit requirement. Stocktake figures are also important for determining company profit.
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It is important that all store records are accurate.
Stocktake also depends on efficiency in the daily routine, such as housekeeping, accurate use of retail
equipment, and correctly completed documentation. Accurate stock records depend on accuracy every day.
All MegaMax staff members are expected to participate in stocktake.
Preparation for stocktaking:
· Staff will be notified of cut off dates for order deliveries, and shelf filling cut off time.
· All stock records must be brought up to date.
· Ensure that all stock items have a ticket with the correct information.
· New staff members must be advised of stocktake procedures.
· All customer special orders must be completed.
· Lay-bys must be separated.
· Goods on loan must be retrieved.
· Floor plan prepared with fixture numbers for shop and the reserve.
· Numbered stock sheets allocated to each area.
· Stock lists prepared.
Procedures on stocktake day:
· Every item of stock must be counted.
· The stock count is then written on the numbered sheet.
· All stock sheets must be added and extended accurately.
· All checks made the previous day must be maintained.
· Check that all documentation is completed prior to stock take.
· At least 10 per cent of the counts should be spot checked to ensure
accuracy in counting.
· Once finalised, the stock sheets must be signed off and verified.
MegaMax floorplan:
5. Reordering Stock
Sufficient stock must be on hand to supply customer’s needs but MegaMax does not have the resources to
store large quantities of stock. Minimum stock levels should be checked regularly to maintain an adequate
supply.
Stock may only be reordered by authorised staff using MegaMax ordering systems. If you are not
authorised to reorder stock, speak to your manager if stock levels are running low.
Sometimes stock that has been ordered does not arrive as expected.
What to do when this happens: 1. Find out why this has happened. Check the invoice and phone the supplier if necessary.
2. Notify staff members of the reason for the delay so they can inform customers when necessary.
3. Place a ‘Temporarily Unavailable’ ticket on the shelf, if appropriate.
6. Dispatching Goods
All goods that need to be sent back to the supplier must be done according to store procedure.
1. Identify the reason for the returns – damage, soiled, oversupply, incorrect goods.
2. Package goods carefully so as to avoid damage in transit.
3. Complete a credit request form.
4. Check that the documentation has been completed accurately – name, address, reason for return,
pricing, and special delivery instructions.
5. Goods for dispatch must be held in the designated area of the reserve.
This will ensure they are returned and processed promptly.
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Introduction to Participate in Stocktake
Stocktake is the actual counting of every
item of stock in the store. These figures
are then compared to the store's 'book
stock' records to show a store's gross
profit. Book stock is a record of stock
kept on the company's books. These
days, many stores would keep electronic
stock records.
Stocktaking is usually done yearly and half-yearly as it is a legal taxation and audit requirement.
Stocktake figures are also used to:
 Determine the total dollar value of a brand or a Department or Store.
 Identify slow sellers and best sellers in a product range.
 Provide figures for profit and loss statements.
Therefore it is important that all records are accurate.
Other types of stocktake include:
 Full stocktake - Every item of stock in the store is counted yearly or half-yearly.
 Cyclical stocktake -Part of a store's stock is counted regularly. For example, perishable foods
may be counted weekly.
 Spot check - Stock in a specific area may be checked because of a discrepancy in the figures.
Example of Stocktaking; Ten tubby teddies
This story illustrates the importance of accurate stock records in a retail store.
This is more than just a story about annual stocktake. It also demonstrates how stocktake depends on
efficiency in our daily routine, such as housekeeping, accurate use of retail equipment, and correct
documentation.
Let's follow the Teddies' journey from the MegaMax receiving bay to the Toy Department. The mishaps
in this story actually happen in real stores.
Ten Tubby
Teddies are
$20 each.
Value = $200
When they arrive
in the store they
are recorded in a
stock record book
In time, when
they've all
been sold the
figures will go
to the office…
… and the stock
records should
balance.
But this will only happen if the Ten Tubby Teddies have been cared for correctly and the sales have
been processed accurately.
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Now, let's have a look at what actually happened.
When Tubby Teddy number one was sold,
the sales assistant accidentally pressed
$2.00 on the cash register instead of
$20.00. This sale was not recorded
accurately.
Tubby Teddy number two became very dirty because
everyone was too busy to dust the shelf. The sales
assistant reduced the sale to $5 but forgot to record
the markdown in the book
This sales assistant has lost another $15 for
the Toy Department. Click on the scales to
see what happens to the balance of the
stock received and the recorded sales now.
Tubby Teddy number three got lost in the Advertising
Department. No-one remembered that it was taken
there to be photographed for the catalogue, so it
wasn't counted at stocktake.
Another $20 sale has been lost for the Toy
Department. Click on the scales to see what
happens to the balance now.
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The other seven Tubby Teddies were all
sold and their sales recorded accurately.
But, by the time stocktake came around the damage
had been done.
Preventing discrepancies at stocktake
What could you do to prevent discrepancies at stocktake, like the one you've just seen with the Tubby
Teddies? Here are suggestions to ensure stock records are documented accurately.
Question; The sale of Tubby Teddy number one was
registered as $2 instead of $20. How could the sales records
have been corrected?
Answer; Cancel the incorrect sales transaction according to
store procedures then process the sale at the correct price
Question; The price of Tubby Teddy number two was
reduced because it had become damaged. How would you
record this transaction?
Answer; Record this transaction in the Markdown Book
Question; Tubby Teddy number three was loaned to the
Advertising Department. How could you keep track of stock
on loan?
Answer; Record loans to other departments in a book, or
electronically.
Electronic stock recording equipment
Stocktake can be done manually or electronically. Most stores use electronic
equipment for their stock records. Staff can order stock, keep track of inventory, list
prices, record markdowns, and record sales by this method. Electronic stock
recording equipment scans a barcode to register the item. The quantity and price
are entered by the user.
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Electronic equipment relies on the use of barcodes. Barcodes are a coding system
used in the retail industry to identify a range of items such as products and cartons.
In fact, barcodes can be used to identify any item that needs to be tracked
Preparation for stocktake
The following stocktaking principles apply to all stores whether the stores use electronic equipment, or
not;
 Stock records must be accurate.
 Stock must be counted.
Louise has allocated two tasks for you to do:
1. Prepare a floor plan with fixture numbers for the shop and the reserve.
2. Check that stock records are up to date in the Markdown Book.
You have to prepare a floor plan with fixture numbers for the shop and the reserve.
Each fixture and each shelf must be numbered so that there is no confusion about which stock has been
counted, and which hasn't. It would be chaotic if some stock was counted twice and other stock not
counted at all. Also, the numbering system helps to identify areas to be spot checked.
Louise will allocate certain fixtures to each staff member at stocktake. This way, she'll know that the stock
on every fixture will be counted.
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