Inventory management is one of the most overlooked aspects in terms of running a business. Whether you are starting a new business and you have a plan, or you already run one, all the inventory planning is probably about having a small room to deposit things.
Inventory management is an integral part of your business. Fail to look after your business inventory, and you will run out of valuable stock when you need it most, but you also risk buying in excess when you do not really need that much.
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Here Are A Few Helpful Tips To Grow Your Business Inventory
Identify The Low Turn Stock
While you can always keep a backup plan for your business inventory – such as inventory financing companies for unexpected situations, it pays off knowing what you have in there and how it goes.
Identifying low turn stock will help you when ordering new stuff or trying to get rid of old stuff. Such things will help you adjust the production and identify things that are no longer in demand.
If you manage to detect a product that gathers dust on the shelf, it is obviously low turn stock, and further purchases should be ceased.
Keep in mind that many seasonal items gain in popularity every now and then, before slowing down. Take gardening products, for instance – no one buys them in the wintertime, but they skyrocket in the warm season.
Dropshipping Is Not A Bad Idea
If you think dropshipping is all about promises to get rich overnight, you are wrong. The truth is dropshipping could be a great option for you as well.
If a supplier can ship things directly to your customers, you will no longer have to deal with associated inventory costs or keep them in stock.
Instead of keeping an eye on every step in the process, you might as well focus on the marketing aspect only. There are plenty of great options there – no more warehousing or fulfillment expenses.
A POS Will Give You All The Details You Need
The POS technology will help you track inventory better than anything else. Indeed, you can count everything yourself, but the truth is technology will give you all the details you need at a glance.
It will save you hours on a weekly basis. It will track sales, give you detailed statistics and show you what you need more or less of.
The software updates your inventory automatically as things sell. When used by the book, such technology will prevent errors in your inventory. You will gain top-notch reporting capabilities as well.
Stick To The FIFO Idea
FIFO is a common approach in business – First In, First Out. Products from your inventory are meant to go out in chronological order. The rule is more obvious when it comes to food and drinks, as they have expiry dates.
Other items must go on the same approach because while there is no expiry date on a bag of cement or some wood, storing such things for ages could cause them to degrade. The FIFO approach is excellent for inventory-based accounting, but it may also save you money in the long run.
Again, while this is a general rule for perishable items, the truth is everything in your stock should take this approach.
Organize Your Inventory
A top-notch organization is a must and for more reasons. First of all, it will save you time – it takes ages to find small things thrown at the back. You thought you will remember where you put them, but you obviously forget after a few weeks.
Apart from saving time, an organized business inventory will also save you money. It looks like you run out of something, without knowing there are a couple of boxed hidden at the back. You will find them the next time you organize the inventory – bad ideas and a waste of money.
Keep everything tidy and organized and make sure everything is visible – plus, a good organization will also give you extra space.
Consider The Supplier Performance
No business owner ever pays attention to supplier performance, yet everyone can agree that suppliers do not always provide consistency.
Tracking your inventory will help you identify problematic suppliers, which will also help you make better decisions regarding the stock.
Figure out which suppliers deliver on time, which ones have low shipment errors and which ones offer the best prices.
It might be difficult to find the perfect supplier to match all these, but you never know. On the same note, suppliers with poor performance will add extra costs to your inventory, as well as your business.
Sometimes, it might be worth paying a bit more for consistency and professionalism. You know you will never run out of goods, risking to make a bad impression on your customers.
Besides, buying more from one supplier may actually get you some deals too.
In the end, your inventory is the heart of your business. This is what dictates your supply for your customers, but this is also a factor that could lead to significant expenses if you fail to look after it.
Growing your business inventory is not necessarily about buying extra things or diversifying goods, but also about making sure your inventory is looked after – a good organization, no waste, and enough supply. Any of the above-mentioned solutions will push your business in the right direction.