For any products-based business, it’s hard to overstate the importance of inventory management. Not only does effective inventory management help you to evaluate the state of your business and reveal various roadblocks to your success, but it also helps you to keep operations running smoothly and ensure that your customers stay happy. And when your business is growing quickly, it becomes even more vital. As we talk to customers of all sizes, we have heard several themes -that’s why we’ve provided these inventory management tips for flourishing businesses:
Use Up-to-Date Software
One common mistake made by many companies is that they continue to use inventory management methods and/or software long after it has become obsolete. And it usually comes down to costs.
But as The Houston Chronicle’s website Chron explains, using archaic inventory management contributes to a host of problems that end up costing your company much more money than the price of quality, up-to-date software. Digitized tracking allows better forecasting, reduces errors, improves customer service, and enhances efficiency. Research the market, and you will likely find a number of cost-effective options that can transform your inventory management practices.
Invest in a Top-Notch User-Interface
As you weigh your options, consider improving the user-interface on your online store. This is especially important if you use dropshipping. The simplest way to enhance your store’s user-interface is to hire UI designer freelancers by using a freelance site like Upwork or Catalant. There you can find a designer who boosts your store’s user experience; in turn, this will help you to manage inventory more efficiently, thus keeping your customers happy – and conversely, nothing will make customers unhappy than an unexpected backorder
Improve Your Forecasting
Forecasting is key to effective inventory management, but you need more than effort in this category. To ensure that you order the right number of the right items for each season, tracking software Vend explains you must project demand as accurately as possible. This involves factors like reviewing your sales over the past year, researching market trends, and the current state of the economy. Any marketing and promotional plans you have for the near future will also play a role in forecasting.
Stick to FIFO
FIFO is a simple approach to inventory management, but without it, you run a high risk of stock going bad, especially if you sell perishable goods. “First in, first out” means that you sell products in the order in which they were created or received from a supplier.
Using the FIFO approach starts with how you arrange your shop floor, stockroom, and/or warehouse; keep the older items in the front and the newer ones in the back. That way, customers and employees will have the easiest access to products you ordered first. As the world moves towards more online grocery orders, this ‘best practice’ will set the foundation for growth.
Audit Your Stock Efficiently
Even with the best software in place, it’s still necessary to do physical inventory audits if your operations are to run smoothly and efficiently. Rather than close shop for a full day or more once a year, consider cycle counting. This is the process of counting a small selection of your inventory at once instead of tackling the job as a large project all at once. That way, you can audit inventory more often, which means that it won’t take as long and that you can do it around your normal store hours.
Check Your Products
Last but not least, make sure you are checking the condition of your products on a regular basis. Whether you have an employee responsible for quality control or a team that checks items during regular cycle counts, it’s essential that all of your products look and function exactly as they’re supposed to. Otherwise, you will set yourself up for some unhappy customers.
If inventory management is lacking, it will significantly harm your business at some point. However, by making necessary changes, you can position your business to thrive now and in the future. Remember to use good software, upgrade your user-interface, and prioritize forecasting. Finally, maintain the FIFO approach for storing and selling products, do regular physical audits, and don’t forsake quality control.
Written by guest contributor, Dean Burgess – find him at Excitepreneur.net