Top 5 Rules for Generating Cash in Retail

As part of the 2025 MAGIC Conference in Las Vegas, Dane Cohen discussed major trends impacting retailers in 2025 with Alexa Sommers (Head Buyer at GOOD THINGS), Marc Weiss (Founder of Management One) and Doug Hilfiker (Retail Expert at Management One).

Most importantly, the panel also pinpointed the importance of identifying how to effectively manage inventory to maximise cash. This is key knowing that on average, retailers allocate 52% of their total expenses to inventory purchases.

Here are the five fundamental strategies to drive revenue and maintain a healthy inventory flow according to retail experts.

1. Nail Your Merchandise Class Structure

Understanding merchandise hierarchy is crucial. Rather than stocking random assortments, retailers should focus on their top-performing categories—whether it’s graphic tees, tailored outerwear, or seasonal must-haves. A well-structured inventory ensures stronger sales and improves buying decisions.

2. Buy with an Inventory Plan—No Winging It!

Impulse buying can cripple cash flow. The panel emphasized the importance of data-driven inventory planning through an inventory management system. Having a set budget and buying strategy ensures that stores invest in the right products at the right time.

Retailers who underbuy struggle to meet demand, while those who overbuy are left with dead stock. The easiest solution? Strategic planning using retail POS software.

3. Keep Merchandise Fresh

Fresh inventory drives sales. The data proves it:

• 90% of sales come from inventory less than 10 weeks old.

• 50% of sales come from items delivered and sold within the same month.

Retailers should constantly rotate stock and allocate budgets for new vendors and product categories to keep their stores exciting.

4. Take Markdowns—They’re Your Friend, Not the Enemy

Many retailers hesitate to markdown products, but the panel stressed that discounting strategically is essential for cash flow. Key markdown strategies to follow :

• Plan for markdowns every 8–10 weeks.

• The first markdown is the cheapest—waiting too long costs more.

• Use targeted promotions to clear slow-moving inventory.

5. Be a Numbers Person

Retailers who track inventory efficiently and use data to guide decisions outperform their competitors. Questions every retailer should ask:

• Do I have too much or too little inventory?

• Am I accounting for seasonal shifts?

• How am I tracking inventory fluctuations?

Using retail inventory software helps retailers make smarter, faster decisions, leading to higher profitability.

The Takeaway

In today’s fast-moving retail landscape, cash flow is king, and managing inventory wisely is the key to keeping it strong. As highlighted in the MAGIC panel, the most successful retailers aren’t just selling products—they’re making strategic, data-driven decisions about what they buy, how they price, and when they restock. In 2025, those who take control of their numbers will be the ones ahead of the game.

Want to take the guesswork out of inventory management? Retailers who started using Management One’s inventory planning and forecasting tools on average saw a 20% sales increase in the 12 months following adoption, compared to the previous 12 months. 

To find out how Management One can upgrade your inventory management in 2025 with advanced tools for demand forecasting and sales optimization, get a free consultation here.