Showroom display pieces: are they part of the stock count?

A corner sofa in the showroom shows as "available" in the record. When a customer asks for a new one of the same model, the salesperson checks the record, says "yes", and at the warehouse only the display piece turns up. A display piece is neither sellable stock like a new item nor scrap. Until this third state is defined in the record, both the count and the sales suffer. Here is a routine that keeps display pieces in the count without inflating sellable stock.

Why a display piece is a separate status

A display piece has been handled for a long time and exposed to sun and dust, so it often cannot be sold at the price of a new item. Yet it belongs to the company, will be sold and has value. If it is mixed with normal stock in the record, three problems follow:

• sellable stock looks higher than it is;
• the piece stays on the floor for years, because nobody has decided when and at what price to sell it;
• the same set is counted twice: once assembled in the showroom, and once as cartons in the warehouse in the record.

Three definitions: status, place, rule

1. Status. A display piece is tracked in the record under a separate warehouse or status code. When it is set up in the showroom, a transfer slip moves it from the main warehouse to the display warehouse.
2. Place. The showroom plan gets place numbers (S-01, S-02 and so on), and each display piece carries a card with its place number and item code.
3. Sales rule. It is written down who may sell a display piece, when and at what discount: for example a set rate of discount and a manager's approval after six months on the floor. If warranty or delivery terms differ, they go on the sales document too.

The rule's content is a commercial decision for you; what matters is that it is written down.

The showroom walk on count day

A showroom count runs differently from a warehouse count; the team walks with a place list:

• at each place number, the model, fabric or colour code and card number are matched with the record;
• the condition is marked A (good), B (signs of use) or C (damaged);
• a photo is taken with the card and place number in view;
• a piece reserved for a customer or waiting for delivery is written on a separate line.

Then the cartons: a set is counted either as cartons in the warehouse or assembled in the showroom, never both. If the record still holds an assembled set as cartons, the count shows a false surplus or shortage.

Example: 17 of 20 sets are sellable

An illustrative case: the record shows 20 sets of a sofa model. The count finds 17 sets in cartons in the warehouse and 3 assembled in the showroom. If display is not tracked separately, the record treats all 20 as sellable and a customer can be promised 20 sets, while only 17 exist as new. With display tracked separately the table reads: sellable 17, display 3, total 20.

Suppose a rule of 15 per cent off after six months on display. At a list price of 9,000,000 som, the discounted price is 9,000,000 × 0.85 = 7,650,000 som. Three sets sold at that price bring in 3 × 7,650,000 = 22,950,000 som, against 3 × 9,000,000 = 27,000,000 som at list. The 4,050,000 som gap is the known loss of value on display pieces and can be reported to management. Without a rule the same gap appears at the moment of sale, through bargaining that differs for every customer. The rate itself is your decision; it only has to be known in advance.

Common mistakes

• Telling a customer "we have it" without taking the display piece off sellable stock.
• Issuing a piece sold from the floor out of the main warehouse; the issue must come from the display warehouse.
• Not using cards and place numbers; when the showroom layout changes, nobody knows which piece is where.
• Showing a damaged display piece as "good" in the record.
• Leaving display pieces out of the count; they hold value in the record but are never checked.

In short

Tracking display pieces under a separate status, place and sales rule keeps the count clean and shows sellable stock correctly. In furniture and showroom counts StockSystem tracks multi-part products as one item, matches every carton of a sofa set and lists incomplete sets, damaged goods and display pieces separately.