February 22, 2023
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Inventory management is critical to your store, without it you could be haemorrhaging cash or missing opportunities. Everyone from market traders to department stores has methods of managing their stock to match their customer's needs.
Good inventory management not only stops you over ordering slow selling products and avoids spoilage with perishable items, it also allows you to identify trends, not only in the market but individual customer needs. By managing your inventory you can even reduce warehouse costs and reinvest in fast selling or new stock.
Miscalculations can lead to cash flow issues, blocking you from investing when the time is right. Similarly, overselling and not delivering when your customers need your product can be a PR disaster and suppliers will need time to either create the product or ship it to your warehouse.
Par levels allow you to set the minimum amount of product, that when reached should trigger an automatic order. Research and use data to set your levels and remember that in peak season, for example, Christmas or sale time, you may need to increase your par level to cope with customer demand.
By properly categorising your company's assets you allow yourself full control over our warehouse. Find a system that suits your company, if it’s product type, value, best sellers or any other means of categorisation. It will allow you to quickly find the information you need, allow speedy auditing and allow you to closely monitor trends in your own store. Is the t-shirt category quickly selling out? Maybe it’s time to invest in a new range to take advantage of the opportunity.
Whilst this may seem obvious for perishable goods, packaging such as boxes can become damaged or jaded over time. This comes down to well-managed warehouse organisation and careful training of any warehouse staff you employ.
Building relationships is a key element to every aspect of e-commerce, however, don’t forget your suppliers and warehouse staff. By having great relationships with your suppliers you may be able to negotiate a lower minimum order quantity and in peak times when stock is selling fast, suppliers are more likely to go over and above for stockists that they know and trust. Communication is vital, and if you’re planning a special event then keep your suppliers in the know and ready to meet demand.
Auditing - no one enjoy doing it, however, it is essential to running a tight ship. Many companies only audit once a year, usually around April in time for the close of the tax year. However, if stock is missing it can be difficult to pinpoint errors with a yearly stock check. It is wise to conduct spot checks on certain products throughout the year, and not just the higher value products.
By accurately predicting peaks and dips in your market, you can make sure to have stock when your product takes off. Easy peasy. If predicting the market was easy billionaires would be commonplace and currency would become redundant. But you can make an educated guess as to when products will become popular, for example, seasonal wear. Look at last year's sales figures if they are available and combine that with this year's projected growth.
Shopify can help you manage your inventory, either for an e-commerce or bricks-and-mortar store. Shopify’s inventory management system lets you group products by category, type, season, sale and more. To get a free 14 day trial, follow this link and banish your order management woes today.
