Inventory management, the foundation of your supply chain, can be one of the most complex aspects of running any business, whether established or starting fresh. Proper inventory control will keep customers satisfied while increasing your bottom line.
Follow these business inventory tips in order to avoid overstocking and sell quality products.
Organize Your Storage Unit
Small businesses depend on storage units to store extra equipment, overstock and items they cannot easily fit in the office. Therefore, maintaining an organized unit is of utmost importance.
Before beginning to pack, take a moment and review all available boxes by taking an inventory of their contents. While this step may seem unnecessary at first, it will make finding specific items much simpler in your storage unit later on.
Subsequently, invest in some markers and label all your boxes with their contents. It would also be wise to create a map of your storage unit; even an imperfect sketch will work; this way you’ll know which box contains what. Cross-referencing with your master list allows you to quickly find it when searching blindly through piles of unmarked boxes.
Don’t Overstock
While an effective inventory management process is key to keeping shelves full and costs at bay, too much stock can result in warehouse related expenses and reduce working capital. Finding the ideal balance requires smart demand forecasting and an intelligent supply chain featuring software capable of automatically spotting slow-moving merchandise and creating automatic reorders – whether for online retail sales or physical stores.
Even the best systems can fall short under certain circumstances. Clothes and accessories may become obsolete over time; medicines may expire or become irrelevant; appliances and electronics rapidly evolve leaving obsolete models behind in a matter of months; this leaves you with dead inventory that erodes in value over time.
Slow-selling products not only cost your organization financially in terms of financial investment and storage fees, but can also reduce customer loyalty. If an item doesn’t sell quickly enough, try offering it as part of another purchase, or making it into a charitable donation that may even qualify for tax deduction. Doing this will build trust among customers while encouraging bigger purchases down the road.
Be Consistent
Effective inventory management requires consistency. Items left sitting around lose value and cost the business money in storage, processing and backorder costs. That is why it is crucial that employees who receive stock are trained in how to process incoming stocks properly – this ensures each box is accounted for; all products received, unpacked and counted at once and that at the end of each day all numbers match up exactly.
Physical inventory counts or audits should also follow a standard process, with an audit team physically verifying numbers against records to find discrepancies that arise; this could occur annually or more frequently depending on your business needs. It’s also important to keep tabs on lead times for your reordered inventory to arrive – this allows you to prioritize which products to order from suppliers.
Keep Your Products of the Highest Quality
Your inventory represents both time and money investments that should be easily accessible when needed. However, keeping low-quality products is detrimental to your business – they lose value while taking up space that could be better utilized elsewhere. If an item doesn’t sell quickly enough, consider offering it at a discount or testing out something different to see if customers respond – if nothing changes it’s best just let go.
Management of inventory for small businesses can be a difficult challenge, yet taking the steps necessary is vital to making sure products are always readily available when they’re needed. Organization of storage unit space, following one-in/one-out rule when purchasing products and using cycle counting to spread reconciliation throughout the year are just a few ways you can enhance inventory control and management.
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