How to Set Up Multi-Location Inventory Management in Your POS

The Multi-Location Inventory Challenge

Running multiple retail locations without proper inventory management is like flying blind. You're constantly guessing what's in stock where, losing sales to stockouts, and tying up cash in excess inventory.

Common Problems Without Proper Systems

Customer wants item that's at another store
Dead stock at one location, stockouts at another
Manual stock counts taking entire days
No visibility of total inventory value
Ordering duplicates unnecessarily

Step 1: Audit Your Current Inventory

Before You Begin

Physical count at all locations: Yes, one last manual count
Standardise product codes: Same SKU across all stores
Clean up variants: Consolidate duplicate products
Document discrepancies: Note problem areas for later

Inventory Audit Checklist

☐ All products have unique SKUs
☐ Variants properly linked to parent products
☐ Supplier codes matched to your SKUs
☐ Min/max stock levels documented
☐ High-value items identified for tracking

Step 2: Choose Your Inventory Structure

Centralised Model

How it works: One warehouse supplies all stores

Best for: Retail chains with central distribution

Pros: Better bulk pricing, easier management

Cons: Transfer delays, higher transport costs

Distributed Model

How it works: Each store manages own inventory

Best for: Franchises or diverse product ranges

Pros: Local autonomy, faster response

Cons: Higher overall stock levels needed

Hub and Spoke

How it works: Main store supplies satellites

Best for: Most multi-location retailers

Pros: Balance of control and flexibility

Cons: Requires good transfer processes

Step 3: Configure Your POS System

Location Setup

Create location profiles:
- Store name and ID
- Address and contact
- Operating hours
- Staff assignments
Set location permissions:
- Who can view other store inventory
- Who can request transfers
- Who can adjust stock
Configure tax settings:
- Different rates by location if needed
- GST registration per entity

Product Configuration

Enable multi-location tracking: Turn on for all products
Set reorder points per location: Based on local sales velocity
Configure safety stock: Usually 2 weeks of average sales
Assign preferred suppliers: May vary by location

Step 4: Implement Stock Transfer Processes

Transfer Request Workflow

Staff identifies need (customer request or low stock)
Check other locations' availability in POS
Create transfer request with quantity needed
Sending store approves and picks items
Generate transfer document with barcodes
Ship with tracking reference
Receiving store confirms arrival
System updates both locations' stock

Transfer Best Practices

Set standard transfer days (e.g., Tuesday/Friday)
Batch multiple transfers together
Use scanning to prevent errors
Track transfer time metrics
Regular inter-store reconciliation

Step 5: Set Up Automated Reordering

Reorder Point Formula

Reorder Point = (Daily Sales × Lead Time) + Safety Stock

Example for a shoe store:

Daily sales: 5 units
Supplier lead time: 7 days
Safety stock: 10 units
Reorder point = (5 × 7) + 10 = 45 units

Purchase Order Automation

Set triggers: When stock hits reorder point
Define order quantities: Economic order quantity (EOQ)
Choose approval workflow: Auto-approve under $X
Select consolidation rules: Combine orders to meet minimums
Configure notifications: Email/SMS to managers

Step 6: Real-Time Synchronisation

Critical Sync Points

Sales: Instant stock reduction
Refunds: Immediate stock addition
Transfers: Update both locations
Adjustments: Sync within 1 minute
Receiving: Real-time availability

Handling Sync Conflicts

Last action wins (timestamp-based)
Negative stock prevention rules
Oversell protection with buffers
Audit trail for all changes
Daily reconciliation reports

Step 7: Staff Training Program

Core Training Topics

For All Staff:

Checking stock at other locations
Creating customer orders for transfer
Processing incoming transfers
Basic stock adjustments

For Managers:

Approving transfer requests
Running stock reports
Investigating discrepancies
Setting reorder points
Managing purchase orders

Training Timeline

Week 1: System basics and navigation
Week 2: Daily operations (sales, refunds)
Week 3: Stock transfers and adjustments
Week 4: Reports and problem-solving

Step 8: Reporting and Analytics

Essential Reports

Daily:

Stock movement summary
Transfer status report
Low stock alerts
Discrepancy report

Weekly:

Sales velocity by location
Stock turn analysis
Transfer efficiency metrics
Dead stock identification

Monthly:

Inventory valuation by location
Supplier performance
Stock accuracy percentage
Carrying cost analysis

KPIs to Track

Stock accuracy: Target 98%+
Stockout rate: Keep under 2%
Inventory turnover: Industry-specific (4-8x typical)
Transfer fill rate: 95%+ same day
Carrying costs: Under 25% of inventory value

Common Pitfalls and Solutions

Problem: Phantom Inventory

Cause: System shows stock that doesn't exist

Solution: Regular cycle counts, investigate shrinkage

Problem: Transfer Delays

Cause: Poor communication between stores

Solution: Automated notifications, set SLAs

Problem: Overselling Online

Cause: Lag in inventory updates

Solution: Buffer stock, real-time sync

Problem: Excess Stock at Wrong Location

Cause: Not tracking sales patterns

Solution: Regular rebalancing, predictive analytics

Advanced Strategies

Virtual Warehousing

Treat all locations as one virtual warehouse for online orders. Ship from nearest location with stock.

Cross-Docking

Receive supplier shipments at one location, immediately transfer to others without storing.

Just-in-Time Transfers

Use sales data to predict and preemptively transfer stock before stockouts.

Seasonal Rebalancing

Automatically shift inventory based on seasonal patterns and local events.

Implementation Timeline

Week 1-2: Preparation

Complete inventory audit
Standardise SKUs
Clean up product database

Week 3-4: System Configuration

Set up locations in POS
Configure products for multi-location
Import opening stock counts

Week 5-6: Process Implementation

Train key staff
Test transfer processes
Set up reorder points

Week 7-8: Go Live and Refine

Launch with pilot products
Monitor and adjust
Roll out to all products

Measuring Success

Month 1 Goals:

95% stock accuracy
All transfers tracked in system
Basic reports running daily

Month 3 Goals:

50% reduction in stockouts
20% reduction in excess stock
Automated reordering active

Month 6 Goals:

30% improvement in inventory turnover
90% reduction in manual counts
15% reduction in carrying costs

Conclusion

Multi-location inventory management doesn't have to be complex. With the right system and processes, you can maintain optimal stock levels across all stores while reducing costs and improving customer satisfaction.

Ready to streamline your multi-location inventory? Get a personalised demo showing exactly how it works for your business setup.