As an entrepreneur, you know that inventory management is one of the most important aspects of running a small business.
Inefficient inventory management can be extremely costly – wasting money on unsold goods and unnecessary storage space.
If you want your small business to thrive, you need to make sure your inventory management is on point. Here’s are our tips!
Tip #1 Plan ahead
It might sound cliche, but being prepared is the best way to ensure that your inventory management process runs smoothly.
Depending on the type of goods you sell, you may want to re-evaluate your inventory levels each month, quarter, or even annually. And if you notice certain items selling out more quickly than others, you can adjust your future purchasing decisions accordingly.
If you’re selling a product that has a long shelf life, you can scale back on your purchasing of that item, but still, make sure you have enough on hand to meet customer demand.
On the flip side, if you sell something that has a shorter shelf life, you may need to restructure your inventory levels more frequently.
Tip #2 Automate as much as you can
Inventory management systems involve a lot of manual processes, so it’s important to try to automate as much of your workflow as possible with inventory management software.
In particular, you’ll want to look into software solutions for tracking your inventory levels. This will allow you to see at a glance how much of each item you have in stock.
Try to automate as many of your processes as you can, so you can focus your attention on other areas of your business.
Tip #3 Pay attention to markdowns and expiration dates
Many business owners neglect to pay attention to the markdown process, but it’s an important part of the warehouse management system.
Expiration dates also are important to track, as certain items may get stale (excess inventory) and need to be resold before customers purchase them.
You’ll want to keep track of the dates when items are purchased, as well as their condition (if applicable).
This will allow you to monitor items that are getting close to their expiration date, so you can restock them or offer them at a reduced price.
Tip #4 Don’t forget the importance of storage
While it’s important to not purchase more inventory than you can sell, it’s also important to actually store your inventory properly.
You might only need to store a portion of your inventory at one time, but you’ll want to make sure you’re storing it in a proper facility.
If you have a physical inventory like you’re storing items like food, beverages, or chemicals, you may want to look for a facility with a high standard of security.
If you’re storing inventory on your own property, you’ll want to make sure it’s properly safeguarded against theft and natural disasters.
Order management also plays a role with inventory – learn all about it in our article “What is order management?“
Tip #5 Track and review your inventory costs
As you track your inventory costs, you’ll want to keep an eye out for anything unusual.
If you notice a pattern where certain items are consistently out of stock, or constantly sell out, it might be time to scale back on purchasing that item.
If certain items are taking up too much room in your facility, it might be time to re-evaluate their importance.
You might be keeping too much inventory or storing it in a manner that’s not cost-effective.
Tip #6 Manage your vendors and suppliers
A lot of the inventory management tips above focus on managing your own inventory and dealing other variables like economic order quantity.
However, you should also try to manage your vendors and suppliers. If you’ve found a reliable supplier, you may want to create a relationship with them. This may allow you to negotiate better prices, or receive discounts for large purchases.
If you notice a supplier is consistently providing low-quality products, or you’re paying more than you should be, you’ll want to switch up your source.
You should also keep tabs on your suppliers, to make sure they are meeting your needs. If they start making changes, you may want to find a new supplier quickly.
Breadstack can help optimize your inventory management so you can continue to improve efficiency and allow yourself to scale. Contact us today to get started!
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