Evaluating your business once in a while is necessary for various reasons. It helps in determining your progress as well as identifies the key areas where you’ve been lagging. One of the most critical parts of your business is its inventory that can help you make the most out of your profits when managed effectively. And this is why you must pay attention to inventory management if you’ve have been neglecting it for too long.
A lot of SMB’s don’t practice proper inventory management techniques when it comes to selling their products. The result? Most of the customers coming to the websites get frustrated finding products they want that aren’t available or out of stock. Furthermore, these customers will go elsewhere for these products. In such cases not only have you lost an opportunity for sale but also a customer.
However, there’s a way out of it that requires self-analysis of your inventory. Ask yourself, how has your small business’s inventory panned out? Do you have the right products available, when your customers need them? Do you lose out on business when your items are out of stock? Or do you lose money when you have a surplus of inventory that’s not selling fast?
No matter why your inventory is suffering, here are the best tips for managing your inventory as a small business-
Tune your forecasting skills
Precise forecasting of your inventory is vital for your business. The way you predict the stock required by your business must be based on various factors such as historical sales figures, market trends, anticipated growth, marketing efforts, promotions etc.
FIFO at your rescue
If you’ve ever read about inventory management techniques, you must be familiar with FIFO. For those who aren’t, FIFO or First In First Out is a practice where items from your inventory are sold in the same chronological order as they were added or purchased. And especially if you’re selling perishable goods, FIFO is something to swear by. For example, if you’re selling make-up products and purchased item 1, then item 2, 3 and so on. You must first dispatch item 1 when you receive an order.
Identify stocks turn arounds
Identifying your low selling stock is extremely important to stop overspending on your inventory. If something that you offer hasn’t sold in the last 6-12 months, its time that you must stop buying them. Alternatively, you can consider smart strategies to get rid of that stock such as offer promotional offers, discounts etc. This way you won’t have any excess inventory wasting your space and capital.
Know your stock levels at all times
As a seller, you must at all times be aware of your stock levels. It helps to build strategies for your business and prioritize your expensive products. If you’re using an effective inventory management software, it will automatically tell you about your stock levels.
Use inventory management software
No matter if you’re a giant business or an SMB, inventory management software is a must for you. It helps in keeping your stock up to date and displays analytics of your sales. Overall, smart inventory management software will help you plan your inventory effortlessly.
Manage the quality of your inventory
Quality control cannot be neglected when it comes to your inventory. No matter your specialty, it is crucial that your products are in a working condition and look well. To make sure that only the best products reach to your customers, make sure your team does a quick check of your inventory as it is sent out for delivery.
Have your A, B and C groups
As a business, you must have greater control over your high-value items. Industry experts suggest segregating your inventory into A, B and C groups. Put items that are of high value which you need fewer in group A, then put over the lowest costing inventory that sells fast in group C. Allocate your remaining stock to group B.
Now that you have the best tips and tricks for managing your inventory (used by successful businesses), nothing can stop you from growing your business. Make sure you use a good inventory management software that fulfills the requirements of your inventory and boosts your business.
