Any type of business big or small inventory management is essential for your business. Good inventory management is very critical for your company, it can help you generate high profits and if not done right then you can suffer heavy losses as well.
Use cloud-based inventory management software
Say bye bye to old excel sheets and make use of the various latest inventory management software present in the market. The software prevents any kind of data entry errors, data loss and provides real-time sales analytics. Data loss can happen due to system crashing or any reason. Cloud-based inventory management software creates timely back-ups. Stock alert and timely reminders are sent via email. And they streamline the inventory workflow by preventing overstock and understock.
Regular checkup is important for high maintenance
Since most of the companies invest in good inventory management routine inspection is ignored by them. From time to time you have to check whether the reports shown by the software are accurate or not. The loss of inventory due to theft, wastage, breakage cannot be recorded using the management software.
Physical count – Physical inventory count is usually done at the end of the year as it is related to accounting and filing income tax. If small mistakes are not taken care of then and there, then at the end of the year, they sum up to be big problems. Now at the end of the year, it becomes very difficult to manage all the problems together. So performing routine cyclic counts is important to find and avoid inconsistencies.
Rotating schedule– Counting inventory all at once can be a tedious task. Rotating schedule among the products like assigning different product lines with different dates spreads the work throughout the year.
Spot counting is also a very good method. In this, you randomly choose a product line, count it and compare it with the supposed numbers.
Maintain the quality of products
Good inventory management helps to maintain high quality of products. All the products in your warehouse should be in a good shape, not expired and should work well. Because keeping damaged goods just stored in your warehouse will occupy unnecessary space in the warehouse and also money will be wasted on managing them. If a customer receives damaged goods it will earn a bad name for a company.
To check quality you can assign this work to the same employees who are auditing stock. Handle them a checklist so that they can quickly examine the product and if there is any problem with any product it is taken care of.
Accurate inventory forecasting
By studying every season’s product trends, past sales during the same time, high demand products, year’s growth rate, marketing, promotions and many other factors you can predict accurately the tricky demands.
Predicting right demands for every season help to order right amount of stock and avoid
- wastage of inventory due to expiration or getting out of trends
- not able to fulfill customers’ demands because of products getting out of stock
And thus save money and enhance profit levels.
Apply FIFO approach for selling inventory
In First In First Out method, the first and the oldest products are sold before the recently brought products. It means that the products are sold in the order they are bought, the product that is bought first is sold first. This method prevents
- stocks getting damaged due to just sitting on the shelves like breaking or looking aged
- it is very good for perishable products like edible materials, makeup, skincare & health products. This way they are sold before they get expired
- for non-perishable products like clothes or tech products it avoids getting out of trend
If you want to use FIFO method store your inventory in that manner, oldest products have to be kept in the front and the newest products at the back.
Don’t forget your ABC’s
Most of the businesses find it easier to manage their inventory by categorizing them into three groups of A, B, and C.
A – expensive products and have low sales frequency, they occupy the least percentage of the inventory
C – inexpensive products and have high sales frequency, they occupy maximum percentage of the inventory
B – lies between A & C, have moderate prices and moderate sales frequency.
If managing inventory and all seems a very difficult task to you then you can consider dropshipping. You have to buy the products from the wholesaler or manufacturer and directly get it shipped to your customers.
Take advantage of all the techniques we mentioned above and let us know in the comment section below how did they work out for you. Also if you have any other technique which we forgot to mention do write in the comments so that everyone can read it and learn from it.