Keeping inventory in order can be a challenging task for small businesses. Check out theses tips on how to manage inventory and keep everything in line.
The true costs of bad inventory management vary from business to business but in total, they could eat up the entirety of your profit margin. If you’re not carefully measuring your inventory based on your customers’ needs, you could make a mistake that takes an entire quarter to recover from. Learning how to manage inventory is as important as learning how to balance your accounts.
Here are 4 tips to ensure that your inventory is properly managed to get you through the lean times and provide for you during fatter times.
1. Keep Meticulous Records
Good record keeping is the key to success for any business. When you’re dealing with retail or an e-commerce site, your inventory is an investment and if you don’t watch your investments, you could lose out.
Keeping records takes time, so you have to work on building a streamlined process. When you get an order in, you should be able to get a digital version of your invoice. That should go into your accounting software, which should also be able to double as an inventory software.
If not, export the date from your invoices to a file type compatible with your sales records. If you understand macros, you can automate this process so that your sales are deducted from your inventory in real time.
One of the biggest mistakes for any kind of retail or wholesale company is buying more than they need. Inventory that just sits around on shelves is as good as flushing your money down the drain. While you can’t risk being out of an item when your clients need it, having your items go out of style is just as bad as throwing money away.
You could be left with a bunch of items that will be hard to sell down the road. You can avoid this with better record keeping.
2. Offer Regular Discounts
Managing your inventory means knowing when to offer a deal and when you can hold on to your inventory for longer.
When you offer a deal, it can mean one of two things. Either you’ve held on to an item for too long and you need to get rid of it or you’re trying to entice new customers to get interested in your products.
Neither approach is bad, the only thing for you to worry about is how naked your ambitions are.
Managing inventory can become chaotic if you have too many sales and promotions running at the same time. You won’t know what a natural or baseline understanding of how fast your inventory moves on an average day. With too much fluctuation, you’ll be chasing a moving target.
Offer your discounts on a schedule whenever possible. While there will be times when you want to have a flash sale to move some inventory out to make room for more, don’t let that be a norm. Scheduled promotions will give you a sense of what your customers want from you.
3. Update Your Security System
When you’re talking about managing your inventory, you’re also talking about making sure you’re not losing any inventory. If you’re a brick and mortar store, you need to keep all of your inventory safely within your store and free from theft. If you run a warehouse or an e-commerce site out of your home office, you should put some security measures in place.
Stores can have security systems in place but nothing compares to well-trained staff who know how to give good customer service. If you help every customer from the moment they walk into your store to the moment they leave, there’s no chance of losing any inventory. If you back your employees up with magnetic strip-based inventory control devices, you can ensure that nothing in your store will go missing.
For non-retail environments, cameras and secure door mechanisms will do a great deal to help inventory control. If you set up a security system to manage who goes in and out of your facility and link it to your mobile device, you’ll never be blindsided by missing items.
See what a company like Intermax can offer you when it comes to inventory control for your warehouse.
4. Manage Your Sales Cycles
As stated above, the benefits of good record keeping include the ability to manage and control your sales cycles.
Once you have that data, it’s important that you put it together in a visually meaningful way. Share that data with your employees so that they know what to expect.
If you’ve on-boarded employees just after your busiest season, visualizations can help them to understand what to expect in the coming months. If you’re currently operating at 50% of what you will do during your heaviest season, they can begin to steel themselves for the busier times.
They will also be on board with helping you get rid of your expired items.
Giving employees a reason to value your methods is as valuable as the methods themselves. When they can understand how it benefits them to rotate inventory and to abide by a “first in-first out” rule for filling orders, you’ll function like clockwork.
Updating your employees on a regular basis about what’s happening with your inventory is a valuable way to keep them looped in.
Learning How To Manage Inventory Is Constant Work
As conditions and trends change in your inventory, you’ll have to adapt your understanding of inventory management constantly. Learning how to manage inventory is a never-ending task for small business owners at every level. However, with hard work put into record keeping, you can make the work easier on yourself.
If you’re also branching out into shipping your own products, check out our guide for tips from the pros.