How to manage inventory: Guidelines,hints, and tips
Any successful, product-driven, business knows how to manage inventory. More importantly, the business will know how to manage inventory effectively. It’s important to have some protocols set up which can really expedite and increase efficiency.
Below are some crucial steps to help you successfully balance, manage, and control your inventory.
How to manage inventory: The basics
- Appoint an inventory manager. Nothing bogs down a business like poor communication. The last thing you need is to chase down answers from multiple people. Save yourself a headache by making one person in charge who knows how to manage inventory stock.
- Invest in inventory management software. There are many types of software for various businesses, and it’s important to choose the one that works best for your business. Finding the best option for your business will streamline productivity.
- Back up all of your data to a cloud based storage system. It’s better to be safe than sorry. You can never predict when a system will crash, so it’s best to have a system in place before anything happens. Cloud based storage is very useful because you can access the information from anywhere with an internet connection.
- Utilize a point of sale system (POS). This will record all of the businesses sales. Remember any sale means that inventory needs to be moved, shipped, reordered, etc. Implementing a POS from the beginning will help drastically with balancing inventory and avoiding the learning curve.
- Operate a first-in, first-out rotation system. This is an easy and important step for any business. You never want product sitting and collecting dust, and this is extremely important for anything that is perishable.
How to manage inventory: Stock
- Prioritize products. Keep track of the core items your business is selling the most of and take special care always to have these in stock especially if your business is known for specific products.
- Account for pending sales. Sometimes there can be an awkward window of time when sales are pending but are still labeled as in stock. If several large, pending sales are filled simultaneously, you can be left with no more product or without enough to fill the orders.
- Be trendy. Do not fall into a rut of reordering the same products. Use your inventory management software and track the products that are trendy. If you miss a shift in what’s “hot,” you can lose a lot of potential sales.
- Use discounts. One of the best ways to clear storage space for new popular items is to offer a sale on items that are becoming less trendy. You may not sell the goods at your ideal price point, but you will make room for the next big opportunity while still making a profit.
How to manage inventory: Hints and tips
- Find the right balance of stock. If you have too much, you can lose money on storage costs, expired products, and damaged goods. Use your sales information from previous months to determine the “just right” amount of inventory to keep your business on track. Sometimes suppliers will offer discounts for bulk orders, but be careful. You can easily lose your savings by paying more for storage.
- Try to bargain with suppliers. Suppliers will often give you their ideal sale price, but that doesn’t mean it’s their lowest price. Sometimes they will be willing to lower it if you ask. In many cases, there’s no harm in asking, and it can help you cut cost.
- Be sure to track your inventory. Tracking should be one of the core features of any inventory management software. This is usually done via bar code scanners for simpler systems.
- Utilize your cloud based storage for inventory tracking. One of the best features of cloud based data storage is that it is accessible from anywhere by multiple people. Inventory is always on the move, and so are you; don’t get caught away from your data.
How to control inventory management: Outside help
Remember that knowing how to manage inventory effectively is a must for any successful business. It will affect your budget, your operating costs, and your ability to keep up with demand.
So, if you’re not feeling up to the challenge of inventory management just yet, you can hire outside help. There are inventory management agencies that can get you started by setting up great groundwork and protocols for you to follow or go so far as to manage your inventory for you completely.
If you are not sure whether to do it internally or get outside help, you can contact our guru for advice.