Inventory management is a huge deal and an undeniable necessity for effective retail management. However, not all businesses practice sound inventory management techniques. If you feel that your inventory management efforts could use some help or a complete overhaul, read on to learn about simple tips that can help you manage your inventory better.
Know and Really Understand What Your Business Stand to Lose
Too many companies see inventory management as something that’s nice to have or a chore when it’s one of the most vital aspects of running a successful retail business. E-commerce sites and physical stores with poor inventory management processes in place typically struggle to give their customers exactly what they need when they need them. They also experience significant losses from customer and employee theft. Labor costs can also easily skyrocket due to additional time required for sorting through inaccurate and improperly organized inventory.
Set Up an Inventory Management System Right Now
For many businesses, the prospect of tracking and counting their ever-growing inventory list isn’t as crucial as the many other duties they need to attend to. This usually results in foregoing setting up an inventory management system and realizing too late that they’ve wasted valuable resources than if they have prioritized setting up a system in the first place. Essentially, having a sound inventory management system is extremely critical as this will serve as the foundation for all your inventory management activities.
Select Vendors and Tools Wisely
Some small businesses can get away with manual inventory management processes. However, for most businesses, whether offline or online, an inventory management system combined with other tools, such as order management software and accounting software, is necessary for accurate inventory monitoring. When trying to decide which tools to use and vendors to work with, it’s vital that you properly and carefully vet, compare, evaluate, and try each option before committing.
Implement Manual Recounts on a Regular Basis
Methodical and regular manual inventory counting is important for crosschecking inventory numbers. For example, you can create a schedule for manual recounts and a system for rotating through different warehouse sections. By paying attention to every possible detail, you will always know where your inventory is at and be able to identify issues such as inconsistencies or theft. Make sure that your business employs a manual recounting system like this so that crosschecking isn’t seen like such as chore.
Employ the 80/20 Inventory Rule
Generally speaking, 80% of profits will come from 20% of stock, so you need to identify these items and prioritize their inventory management. You have to understand the life cycle of each item, which includes the amount you sell weekly and monthly, and then monitor them closely. Keep in mind that these items bring you the most profit, so so-so inventory isn’t an option.
It is time for you to take the reins of your business’ inventory and stop wasting opportunities for growth and increased profits. Select the most suitable inventory management tools and processes and implement them as soon as possible. The time to act is now.