How you price and manage your inventory can make or break your grocery store or market.
The cost of goods fluctuates. Vendor pricing might be different than retail value. It can be challenging to track all your inventory and exactly how much everything costs — especially products priced by weight.
This article will examine some of the most popular inventory costing methods and how they affect your business. We’ll also review some top weighted inventory tools to help improve your inventory process and save you money.
How To Calculate Price by Weight: The Basics
Let’s begin this post by answering the central question: how to calculate price by weight.
The basic calculation for pricing goods by weight is simple. You take the total cost of an inventory item and divide it by the weight. For example, if five pounds of ground beef costs $15 total, the price per pound is $3.
$15 / 5 lbs = $3 per lb
However, calculating price by weight is just the tip of the iceberg when it comes to tracking and managing weighted inventory in your store. How can you track and manage inventory effectively? You can choose from several techniques.
- Manual/Standard Cost: You will manually assign a standard cost for each inventory item using this method. This method is tedious and inaccurate, especially as vendor prices fluctuate.
- FIFO: First in, First out (FIFO) is an inventory management approach where the cost of goods sold is calculated using the oldest inventory costs first. It assumes that the oldest stock is sold first.
- Weighted Average: Inventory value is recalculated for each purchase by dividing total cost by total units. Weighted Average Cost per Unit = Total Cost of Inventory / Total Units Purchased.
Related Read: [REVEALED] How Often Do Grocery Stores Do Inventory?
Let's take a closer look at the weighted average approach with an example. If you originally purchased 10 units for $100, the weighted average cost is $10 per unit. If you then purchase another 10 units for $140, there are now 20 units at a total cost of $240, so the new weighted average cost per unit is $12.
The weighted average method provides the most accurate cost basis over time. For maximum efficiency, use a cloud-based point of sale (POS) system with real-time inventory tracking in conjunction with your weighted average inventory cost management techniques. With this in mind, let’s explore our list of the top five point of sale tools you can use for weighted inventory management.
5 Top Tools for Weighted Inventory
1. Epos Now
Epos Now is a comprehensive point of sale solution designed to enhance operational efficiency and customer satisfaction. Epos Now offers automated stock counts for weighted averages and real-time inventory management.
Key Features include:
- Wireless Stock Scanner: Enjoy faster stock counts with the Epos Now wireless scanner, saving valuable time for your staff and streamlining inventory management processes.
- E-Commerce Marketing Integrations: Showcase your inventory online with NearSt, to reach shoppers researching products online. This feature helps increase your store's visibility and attract more customers.
- Multiple Payment Options: Increase sales by accepting card, cash, and mobile payments with Epos Now Payments. By offering multiple payment options, you can cater to diverse customer preferences.
Epos Now offers a strong solution for grocery stores aiming to streamline operations, boost sales, and improve overall efficiency.
Pricing: Epos Now’s packages start at $99 per month.
2. IT Retail
IT Retail offers a comprehensive POS solution explicitly tailored for grocery stores and butcher shops, providing robust features to streamline operations and enhance productivity. IT Retail offers numerous grocery- and market-specific solutions and features.
Key Features of IT Retail include:
- Back Office Inventory Management: IT Retail provides efficient back office inventory management tools, allowing grocery store and butcher shop owners to track stock levels, manage vendors, and optimize inventory replenishment processes.
- Shrinkage Calculation for Weighted Inventory Tracking: With IT Retail, you can accurately calculate shrinkage for weighted inventory items, enabling precise tracking of inventory losses.
- Purchase Order and Receiving Features: IT Retail's purchase order and receiving features are specifically designed to cater to weighted cost requirements. This lets you create and manage purchase orders, track deliveries, and reconcile inventory.
IT Retail's POS system is tailored to meet the industry's unique needs, offering a range of features to streamline operations, improve inventory management, and enhance overall efficiency.
Pricing: Get a custom quote online using their free pricing tool.
3. Markt POS
Markt POS’ powerful POS solution is designed specifically for grocery stores, markets, and butcher shops, providing a variety of cutting-edge functions to simplify business processes and improve customer satisfaction.
Some key Markt POS features include:
- Advanced Inventory Management: Markt POS provides robust inventory management tools, allowing grocers, butchers, and fish shop owners to track stock levels efficiently, manage vendors, and optimize inventory replenishment processes.
- Flexible Options for Weighted Inventory: Markt POS gives users flexible options for weighted inventory items to enable accurate tracking and sold-by-weight item pricing.
- Low Stock Notifications: You can use Markt POS to receive timely notifications when inventory levels are low, allowing you to restock shelves promptly and ensure customer product availability.
- Recalculation of Weighted Valuations: Markt POS supports recalculating weighted valuations, ensuring accurate costing and pricing for inventory items sold by weight.
Markt POS empowers business owners to streamline operations, improve inventory management, and enhance customer satisfaction with its comprehensive set of features tailored to the industry's unique needs
Pricing: See your exact price with our transparent build and price tool.
4. POS Nation
POS Nation offers specialized POS solutions tailored to small businesses, including garden centers, convenience stores, specialty markets, and grocery stores, providing comprehensive features to streamline operations and enhance business management.
Key features of POS Nation include:
- Unlimited Item Database: POS Nation offers an unlimited item database to handle weighted valuations. You can easily add and manage products without worrying about database limitations, ensuring smooth transaction processes.
- Automated Case/Carton Inventory Counts: Automated counts for weighted inventory simplify tracking and save time while reducing errors.
- Inventory Management for Weighted Cost Tracking: POS Nation's inventory management system simplifies weighted cost tracking, allowing you to monitor inventory costs associated with weighted items accurately.
POS Nation empowers grocery store and market owners to efficiently track inventory, speed up checkout processes, and manage vendors effectively.
Pricing: Get a custom quote using their online pricing tool.
5. Lightspeed
Lightspeed offers a comprehensive retail platform designed to streamline operations and drive business growth. They offer solutions for bars, restaurants, golf courses, and retail stores.
Some of Lightspeed's key features include:
- Weighted Average Cost Method: Lightspeed allows users to set up the weighted average cost method for inventory valuation.
- Recalculation of Weighted Average: Lightspeed automatically recalculates the weighted average each time inventory is purchased, ensuring up-to-date and accurate inventory valuations. This feature reduces errors in inventory management.
- Perpetual Inventory System: Lightspeed maintains a perpetual inventory system with running totals, providing real-time visibility into inventory levels and facilitating efficient inventory management.
Lightspeed empowers retailers to improve inventory accuracy, streamline operations, and drive business growth with its advanced POS system and comprehensive retail platform.
Pricing: Lightspeed’s Standard package starts at $119 per month.
How To Calculate Price by Weight: Your Best Solution
Managing a profitable grocery store relies on excellent visibility and inventory control — calculating costs by weight is just one small piece of effectively tracking product profitability.
You need an integrated inventory management and point of sale system to minimize waste, avoid stockouts, and understand your best- and worst-performing items. Rather than piecing together separate tools, use technology built specifically to meet the needs of high-volume markets, butchers, and specialty food retailers.
Markt POS provides an all-in-one solution combining inventory tracking, purchasing, reporting, and front end order processing in one seamless platform. Streamline ordering based on low stock alerts and expiration dates and secure a complete overview of profit margins for faster, more informed business decisions.
Schedule a demo with Markt POS today to learn how our unified hardware and software solution can optimize your store’s weighted inventory management solutions.
