FIFO: What is it & Why is it Important?

FIFO: What is it & Why is it Important?

FIFO - What does it mean?

Managing a busy, successful flower business requires attention to detail in many different areas simultaneously. It's really easy to be distracted with all the things that have to get done, especially during the holidays when your window of opportunity to sell and produce is narrow and you're trying to make the most of it. One thing you can't lose sight of in all the chaos though is keeping your eye on inventory and quality control that can greatly affect your bottom line. Inventory rotation is a key component to minimizing waste or shrink from lost inventory. FIFO is an acronym we suggest using daily as a friendly best practice reminder:

F - First
I - In
F - First
O - Out

As a general guideline, the oldest product should be the first out on the sales floor and the most easily accessible to customers for the best sell through. This rule seems easy enough, but when we're pressed for time unfortunately it's something that can get overlooked and could be costing you a lot.

Why is FIFO Important?

FIFO is important for many reasons but they all add up to one thing: loss of profitability. By not controlling your inventory you will most certainly affect your business in a negative way. Here are some things that can happen when you don't follow the FIFO inventory management system:

  • Short date: older product won't have as much time on the sales floor before it needs to be thrown out.
  • Negative customer experience: if product does make it into the customer's hands before being thrown out, they won't have the same amount of vase life and probably won't be as happy with their purchase and may not come back to you the next time they buy flowers.
  • Ethylene: older product will produce Ethylene at an accelerated rate compared to the fresher flowers, creating a damaging environment for the whole display.

FIFO Recommendations

We have a few tips and tricks for easy FIFO practice, following these recommendations on a consistent basis will make FIFO a routine that becomes second nature.

  • If you aren't processing dry pack or displaying a wet pack shipment immediately, after your quality control check is done and you've received product be sure to rotate existing inventory forward and put newest boxes in the back of the cooler. When re-stocking or processing always pull boxes from the front first.
  • Before bringing new product to the sales floor cull all displays checking sell by dates and removing all product that is out of date or not sellable.
  • Consolidate bouquets or bunches of older products and move forward. So, if you have a 3 tier display, the oldest product should be on the 1st tier or floor closest to the customer and easy to reach.
  • Newest product should be placed behind older product, usually the highest tier and furthest away from the customer.
  • Culling, consolidation, and rotation of product should be performed at a minimum once daily or more depending on sales volume. This will also keep displays fresh, full, and selling.

Questions? Get in touch with FloraLife! Our team of experts is ready to help!