If you’ve been handling your business long enough, you should know by now that there is more to it than selling your products and attracting customers. It’s equally important that you pay attention to the details under the hood, such as the exact amount of merchandise you have in store and the speed at which they are depleting. This is where inventory comes in. By holding a thorough inventory of your stock on a regular basis, you can enjoy smoother operations and actually save money.
So whether yours is a startup business, the one compelled you to vacate your garage to hold your supply, or it’s already a sizable company where you have several stockrooms, you should make inventory a priority. Here are five more reasons why you need to keep tabs on your products before and after they are sold.
• It helps you monitor yours stocks easier.
The central idea behind doing an inventory is to track how much of your supply was sold and consequently how much of it is still available. By adapting an inventory system, you can easily streamline and schematize how you and your staff oversee your products. You’ll also be able to determine the pace at how your stocks diminish. This will help you coordinate succeeding deliveries as well as organizing the goods you have on hand.
• It minimizes redundancies.
When you know the contents of your storehouse like the back of your hand, you’ll be able to eliminate lapses such as overlapping or duplicating orders. An inventory system will allow you to keep track of the orders that you made and the ones that were already fulfilled.
• It saves you from missing a sale.
In business, just as in life, first impression is important that’s why you need to make a good one to potential clients. Unfortunately, one of the most disappointing circumstances that can happen to customers is to learn that the product they are ordering is out of stock. By doing an inventory, you can avoid missing a sale just because a product was unavailable. With an inventory system, you can track which of the merchandise is thinning in number. Afterwards, you can place an order immediately to replenish your stocks.
• It prevents you from overstocking.
While it’s all right to have a plenty supply of your products on hand, overstocking has its disadvantage. For instance, storing too much of the merchandise you’re selling could mean shelling more money than what you’re supposed to. In addition, you could also risk for the excess products to just go bad lest they aren’t sold.
Basic Inventory Techniques
Now that you’re aware of the importance of holding an inventory of your business’ merchandise, it’s time to learn some basic techniques you can employ to make this practice more efficient.
• Project a sales forecast.
If you are at least in the second year in the business, you can use the previous year’s sales reports to estimate how you will perform in the coming term. A sales forecast can help you assess which direction you should go in the coming term and how much merchandise you should order. In addition, imagining several scenarios on what can happen to your business can also devise different solutions in case you encounter drawbacks.
On the other hand, you might have a hard time figuring out how your sales will turn out if you’re in the first year of business. One of the things that you can do though is to establish a good relationship with your suppliers. When you are constantly in good terms with your suppliers, you can enjoy the privileges of having a constant influx of the goods you need for production or the products that you are selling. For instance, if you have a consistent supply, it will be easier for you to project standards (e.g. threshold for surplus and deficits) which you can use as a guide for future inventories.
A pleasant rapport with your customers, on the other hand, can encourage them to patronize your products. If you're able to meet your sales target for a specific period, it will be easier for you to strike a balance between supply and demand. This kind of data can help you envision how you can outperform yourself in the coming terms and which areas you can escalate or tone down a little.
• Track constantly.
Regardless of how long you’ve been in the trade, it’s crucial that you keep on tracking your products and sales. This may be a little tasking for bigger businesses since they’d have more stuff in their inventory as compared to small enterprises. However, having a shorter list doesn’t mean you should be complacent as one detail lost to you could mean a significant value in your sales.
• Buy in bulk.
Buying in wholesale is already popular among big players, and small entrepreneurs have also preferred it as a means of accumulating their goods. Buying in bulk can save you money not just in a product’s unit price but also in the shipping charges.
• Utilize an inventory management system.
Thanks to technology, tracking and managing your inventory can be within your fingertips. You can now take advantage of inventory management software available online. These programs include conveniences such as computer-based monitoring system which can help you supervise orders, deliveries, and stocks.
Remember that keeping track of your supplies and merchandise can be a tedious task so it’s important that you enlist all the help you can get whether it’s from your staff or technology.
How do you manage your inventory? Share some tips with us via comments below!