Inventory management should be a top-priority for businesses of all sizes, including small companies; even local mom-and-pop operations. It allows you to keep stock of your stock, allows you to keep your inventory refreshed so that you have what your customers need when they need it, lets you know where your products are so they can be easily accessed, and even gives insight about the success of your products by illustrating what’s selling and what isn’t. In short, managing your inventory is essential for your overall success.
While inventory management is crucial, as a small business owner, it can seem like a difficult task; but it doesn’t have to be. Below, we share some tips that will make keeping tabs on your inventory a whole lot easier to tackle.
Make Use of Inventory Management Software
One of the most effective ways to simplify and improve the efficiency of managing the inventory of your small business is by investing in inventory management software. This software, as the name suggests, is designed to help you digitize your inventory. Doing so makes it a lot easier to keep track of your products, allows you to better forecast demand, and cut costs. There are a lot of different software programs available; we recommend choosing one that can connect to your smartphone or tablet so that you can keep tabs on your stock at a moment’s notice, no matter where you are.
First In, First Out
The first in, first out (FIFO) approach should be followed. With this approach, the products that were ordered first or produced first should also go out first. This is particularly important for perishables and anything that has an expiration date, but it’s also a good strategy to follow for non-perishable items.
By following the FIFO approach, you can ensure that your customers are getting the freshest products. Doing so will ensure their satisfaction and keep them coming back for more; plus, it helps you keep waste to a minimum, which can have a big impact on your bottom line.
Target Low-Turn Items
Low-turn items are any products that haven’t moved off your stock shelves in at least a year. It’s important to keep tabs on low-turn items so that you know when it’s time to stop ordering them, otherwise you could end up continuously re-supplying when there’s no need (and spend money unnecessarily). It’s important to note, however, that some items may be slow to turn during certain times of the year; for example, if you stock Christmas decorations, they obviously aren’t going to sell during the start of the year. As such, it’s important that you keep this in mind while you’re assessing your low-turn inventory.
Once you’ve successfully determined which items aren’t selling, regardless of the time of the year, then you can decide that it’s time to stop keeping them in stock. Consider steeply discounting what you do have so that you can move it and at least make some sort of return. By getting rid of low-turn items, you can save yourself big bucks and make room for more products that are selling so you can make a bigger profit.
Outsource Order Fulfillment
If you really want to simplify inventory management, consider outsourcing order fulfillment to a professional company. A professional service will handle all aspects of order fulfillment, including storage, picking, packaging, and shipping. They’ll also keep track of your inventory and let you know when new products need to be ordered. By outsourcing order fulfillment, the burden of inventory management can be taken off of your shoulders.