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The Importance of Inventory Management: What It Is and Why Your Business Needs It

It turns out that when customers land on a page showing that you’re out of stock on something, you still have a chance to convert them. However, this is a snowball’s chance in hell type of situation that doesn’t contradict the importance of inventory management for companies like yours. If you don’t have a lot of control over your inventory, you’re liable to lose out on customers when you should be converting them.

Here are four of the biggest reasons to use an inventory management system.

1. Stay Ahead of Competitors

If you want to always have what your customers need when they need it, you need to have strong inventory management. When you have what your customers need whenever they order it, then you’ll be one step ahead of your competitors. The number of companies who never run out of an essential product is limited to only the best in the business.

When you don’t have what your customers need, they could have a cart full of products that they want and just abandon them. Given they do more and more of their shopping online, there’s no embarrassment attached to abandoning a cart in the digital aisles. Typically, you have to walk all around and put things back, but now when you’re shopping online.

If you want customers to be faithful to you, you need to be faithful to their needs. There are so many other companies they could choose from and the last thing you want to do is give them a reason to go elsewhere. However, when you don’t give them what they’re looking for, you’re doing just that.

Tight inventory control means that you know what you have in stock and your customers get what they’re looking for when they need it. This reliable website has some more information on what this could mean for your company.

2. No Apologies

When you have good inventory control, you never have to say you’re sorry. Having inventory management means that when someone places an order online and their screen reads that the product is in stock, they’ll get the product. They’ll never be a chance for you to have to apologize for a missing product or something that should have been available. 

When customers get an email saying that they can’t have the product they ordered and thought they paid for, they’re likely to go somewhere else. No one wants to be disappointed and one instance of not getting the products you intended to have will lead shoppers somewhere else.

While every customer wants you to stay you’re sorry when you make a mistake, consumers are less and less willing to accept mistakes under any circumstances. However unreasonable, customers expect flawless perfection every time so that they can get the products they came to you for. When you don’t have to apologize, you maintain the illusion that you’ve got everything 100% under control, no matter the volatility behind the scenes.

3. Plan for Seasonal Changes and Trends

When you’ve carefully managed your inventory, you ensure that you’re ahead of any seasonal changes or changes to trends. Inventory is a great way to look ahead to where you need your company to be ahead of holidays, sudden trend spikes, and changes to the market.

Every holiday season, there are some expectations that you’ll have certain products and services available. While customers don’t expect the same thing every year and you can’t predict what they’ll want exactly, you can watch trends year after year. The more time that you spend looking at your inventory’s history, the more you’ll be ahead of expectations.

Inventory management means that when an important holiday hits, you won’t be short on any of the inventory that your customers expect. When you’re prepared for seasonal changes, you can start off with a promotion that moves a lot of product. This gives you the edge on your competitors and ensures that you don’t fall behind when customer demand goes up.

4. Tracking and Transparency

Inventory management doesn’t just mean that you’re able to watch things go in and out of your warehouse. You also get the chance to learn more about your business model and how you could improve it. When you look at the data that your inventory management system has captured, you can learn about where your strengths and weaknesses are.

When you have inventory management, you always get to know where your inventory is and how much it’s worth to your business. If you use barcode scanners to track inventory, you also get to know where things are at all times.

This ensures that you’ll keep the right amount on hand at all times. If you’re worried about becoming overflowed with inventory then you should use an inventory management system. You’ll be able to watch the full life cycle of a product under your roof and ensure nothing falls through the cracks.

You won’t have a bunch of unused inventory sitting around that you have to discount to get out of the door.

You’ll also improve your relationships with your vendors. When everything is easily tracked, you can inform your suppliers of what you need and when you need ti. This keeps your company running smoothly so that everyone knows what to expect.

This helps suppliers ensure that they’ve got enough of what you need as they watch items flow out of your warehouse. The more transparent you’re able to be with your suppliers, the better you can serve your customers.

The Importance of Inventory Management Is Huge

If you haven’t yet realized the importance of inventory management, you haven’t had the chance to lose out on customers yet. If you lose customers over low inventory, you’ll find that there are few ways to bounce back.

If you want your marketing efforts to work even if you run out of a product, check out our guide for failsafe tips.