Mismanaging inventory will undoubtedly lead to costly mistakes. Without an accurate account of inventory, a overload of problems lurk in the shadows. It takes constant effort, but staying on top of the inventory aspects of a business will facilitate sales and limit rupture or overage. Here are a few simple steps to get you going in the right direction and keep everything under control with your inventory management.
This is the nitty-gritty of inventory management, but it has to be done. You will need to cut out a generous amount of time to get precise and accurate counts of everything. This is the information you will feed through to your accounting systems and if this is off, then so are all the numbers in your books. When the numbers add up, your sales go up!
Replacing your inventory is multifaceted and should be looked at on a long-term basis. But firstly, make sure to be ordering only what you need—or what you will need. Having too much of a certain product will not only take up more space in the warehouse, but also increase the risk of getting caught with unsellable stock on hand. Getting rid of it will be a nightmare.
Look at the data and make a monthly forecast. A tight budget requires tight inventory practices. Having an oversized amount of stock that hasn’t sold yet means money not yet available to pay suppliers. Depending on how much you sell, you should have a cycle of inventory always being filled the moment it is emptied. Also take lead times from your suppliers as a buffer zone in terms of time in advance that you will need in order to place orders that arrive just as your stock runs out!
Drop shipping is another way of managing inventory. This is when you leverage a manufacturer to hold your inventory in their warehouse, and they may even send it from that facility to your client. This is especially useful when dealing with already limited warehouse space and moving large quantities of product quickly and on a regular basis.
If you stay on top of inventory management, you will have more warehouse space and it will help you to stay within the parameters of your budget. These practices are ineluctable to the success of your business!