How to Adopt a Solid Inventory Management System for Your Small Business

Two Customers in a Small Business
July 30, 2020
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When it comes to inventory management, any number of things could go wrong. Unfortunately, inventory management mishaps can create some seriously costly issues for your small business, including missed sales and expensive storage fees. Avoiding these issues will only become more difficult as your business grows and expands. This is why it’s crucial to implement a solid inventory management system as soon as possible. Here are some tips to help you get started!

Automating Inventory Management

Small business owners like yourself can save a lot of time and money by implementing automation technology wherever possible. While you may already be using chatbots or other automated customer service tools, keep in mind there’s plenty more you can automate. When it comes to inventory management, you can automate several steps in the process to reduce the need for time-consuming data entry, and avoid common human errors. Instead of tracking your inventory with a bulky spreadsheet, take advantage of specialized inventory management software! Many software tools will integrate seamlessly with your online e-commerce store or retail point-of-sale system, updating your inventory information with every sale or product return.

If your business is experiencing rapid growth, consider automating your inventory storage and retrieval system. According to 6 River Systems, automated storage and retrieval systems (AS/RS) use computers and robots to speed up warehouse processes by picking items for shipping and storing inventory in specific locations. Not only can this reduce your labor costs, but also improve the accuracy and efficiency of your order fulfillment process.

Where to Find Help

Inventory management can be very difficult to navigate if you’re not the tech-savvy type. This is where it pays to hire knowledgeable help. Consider looking for a freelancer who can help set up your inventory management system and create a user-friendly dashboard that you can navigate yourself. Online job boards can be a great resource for finding talent, whether you need someone to do admin support, troubleshoot your inventory issues, or build a custom inventory management system for your small business. It’s also a good idea to invest in inventory training for your staff. When all of your employees understand how to use your inventory management system properly, you’ll be less likely to encounter human error.

Solving Inventory Issues

With the right software and a team of people who know how to handle your small business inventory needs, you should be able to minimize mishaps and keep everything running smoothly. However, there is still a need to solve the most common inventory problems so you can minimize the impact on your bottom line.

One common inventory problem is understocking. Not having enough inventory can hurt the reputation of your brand, especially if running out of stock is an issue that your customers experience frequently. Of course, you’ll also miss out on all of those sales that would have gone through if you had the inventory available. Understocking also means risking having to pay for faster shipments of items you run out of.

Fear of understocking often creates the opposite problem for small businesses. According to SMARTer Manager, overstocking inventory can be just as costly. Holding too much inventory ties up your available funds so you have less capital to put toward marketing or developing new sales channels. This excess inventory may also mean extra storage costs and can even lead to product deterioration. 

The best way to minimize both of these problems is with good forecasting. Take a look at your past sale trends to determine which products sell more quickly than others, or if seasonal factors affect demand for different products. You should also stay up to date with trends in your industry that could affect product demand or pricing. For example, you might come across new competing products that could potentially reduce demand for yours.

Many small business owners don’t start thinking about inventory management until it’s too late. Now is the time to adopt a solid system that will grow with your business, so you can avoid costly problems as your business expands. While it may take a bit of an upfront investment, organizing your business’s inventory management needs will quickly pay off.

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