Running a successful business that revolves around buying and selling various items requires proper management of inventory. It is essential to be able to identify the flow of items that are being checked in and out of your inventory. When you are not aware of your inventory and cannot track what items are available, where they are located or where they can be purchased by customers, efficiency problems can build over time.
Below we have listed seven tips that can help you take control of your inventory and aid in running a successful business.
ENSURE ALL AVAILABLE INVENTORY IS FOR SALE
It’s important to ensure that all inventory that is available is for sale. If items located in your warehouse are not listed for sale, your business cannot create revenue. This also causes space issues. For example, if a wide variety of items are not listed for sale and are just sitting in your warehouse, chances are you will run out of room for items that you are selling because you’re not counting or tracking all your available inventory.
BE AWARE OF YOUR LEAD TIME
It’s important to always be aware of your lead time. Lead time is the duration between when you order an item and when it arrives. While many sellers enjoying “just in time inventory,” this though process should actually be avoided. This is because it can lead to lack of awareness and the possibility of running out of inventory. It is vital to keep track of your lead times so that you can best judge when you will need to restock and item. This will also ensure that customers are getting the items they want when they want it.
KNOW THE STOCK NUMBERS AND WHAT IS NEEDED
Knowing stock numbers and when an item is needed can help keep inventory running smoothly. You should consider using a buffer stock, especially for items that have a high sell rate. For example, if you average 100 orders on a specific item with a 6 month range, it would be efficient to consider ordering 200 of the items for upcoming months. This negates the chances of this said item running out and allows inventory of this item to be rolled over into the next month.
UTILIZE MULTIPLE SELL CHANNELS
To ensure new selling alleys are being opened, it’s important to utilize multiple selling channels. This enables the ability to distribute a larger amount of inventory. Be sure to consider all possible areas to distribute inventory and to assure that each is cost-effective and is also generating income.
TAKE ADVANTAGE OF MODERN TECHNOLOGY
Modern technology today eliminates the need to manage hundreds of spreadsheets. Today, there are an array of services and programs that manage and track inventory and don’t require constant updating and editing. By utilizing an inventory tracking system, you can save time and can also lessen inventory management loads. It also enables you to focus more on potential revenue gaining aspects of management.
KEEP TRACK OF ALL INVENTORY COSTS
Keeping track of inventory costs is crucial. Not only is it important to know what the original price of an item is, but also the cost involved with transporting, distributing and housing the item. Money can be potentially saved if proper measures are taken to track all inventory costs.
DON’T HOLD ON TO OLD INVENTORY
A big no-no is holding onto old inventory. Inventory that is not sold for over a year will most likely not sale and will not be of any use to your company in the future. It’s important to consider discarding the item and not worrying about the amount of money that was lost purchasing it originally. More often than not, a business will come across an item that will note sell that way it was expected too. That is okay, but is it important to discard the item in a cost effective way and then move towards the future.