Inventory management is one of the most important systems of any business structure. Keeping a close tab on how your stocks move—from the moment they are bought and manufactured to their storage and sale—plays a key role in tracking the lifecycle of your products or services. That’s why it’s crucial to have an effective and systematic approach to this process.
An accurate inventory management system enables companies to govern real-time inventory conditions, plan and order stock items better, and process orders promptly and correctly.
Inventory management can be tricky and challenging for businesses that are yet to find an efficient and systemic flow managing this process. But fortunately, you’re at the right place. The visual graph below illustrates some inventory management tips along with handy inventory management software tools you can try for your small business.
Top Inventory Management Tips
Accurate and effective inventory management practices can help boost your business profitability and sales. So, make sure to keep these practical inventory management tips in mind.
- Monitor and audit your inventory
Using systems like barcode scanners helps you track the number of stocks and their accompanying information accurately. Scanning your goods puts them in your inventory system, allowing you to keep track of which items are running low on supply or products you have an excess of.
- Do proper warehouse management
A disorganized warehouse is a recipe for mismanagement and a whole lot of inventory headaches. Proper warehouse organization and management are crucial to accurate inventory procedures. Do regular housekeeping and sorting to ensure all products are in their proper places and stocks are well-maintained.
- Do the 80/20 inventory rule
Know that 80% of your profits are from 20% of your stock or products you carry. A good inventory management system and practices can help you determine which items are the most profitable. Find out how many of each item you have to sell weekly or monthly and keep an eye on those numbers to manage them efficiently.
- Understand the ABC analysis
For more efficient inventory and warehouse management, the 80/20 inventory rule serves as a guide to categorize your inventory into three classifications: A, B, and C.
Category A: These items generate the most profits and make up 20% of your stock, even if they don’t sell as regularly as others.
Category B: These may not be as valuable for your business (e.g., less expensive items), but they still sell well, so it’s worth keeping them in stock.
Category C: While these may not be high-value and high-margin items, they sell consistently.
- Have emergency plans
Inventory management ensures you that your stocks are at proper levels. However, that doesn’t mean you’re immune to emergencies like shipping delays or stock shortages. That’s why it’s best to prepare for cases like these. Make sure to allocate a budget for extra rush shipping fees and supply replenishment.
- Liquidate excess inventory
Your storage space is valuable real estate, so it’s important to keep your warehouse with high-demand items or products that sell out regularly. If you notice dead stocks or surplus inventory sitting in your warehouse for far too long, consider putting them on sale or giving them away as freebies.
Alternatively, you can sell excess inventory to surplus companies to help you free up space and obtain capital for your business.
Related Post: How to Liquidate Your Surplus Inventory?
Inventory Management Software
Selecting the right kind of inventory management system for your small business can be difficult. Here are several solutions you can consider to replace your outdated tools and see an increase in profits.
Ordoro is a budget-friendly inventory management solution that acts “as a control center for all matters inventory.” It’s ideal for dropshipping businesses, as it allows them to take and process orders within the software through the Vendor Portal. It also has a stock alert feature, where you get alerted when stocks of certain items are low.
This tool lets you monitor every order and stock in your inventory, so you have a good idea of the movement of the items for more efficient business management. In addition, Zoho Inventory has a multi-channel inventory management structure, enabling you to set up your Amazon, eBay, Etsy, or other pages and run your business in one place.
QuickBooks Commerce does a great job at monitoring and generating reports about your sales and inventory. Its Advanced Inventory feature lets you track real-time your inventory items and provide insights about inventory management. Apart from these, it also has unique features like expense tracking, tax calculation, and invoicing.
This easy-to-use inventory management tool makes the task of keeping tabs on the items that come in, stay in, and come out of your warehouse a lot easier. It offers handy features for barcoding, manufacturing, purchasing and receiving, stock tracking, reordering, and more.
Upserve is another inventory management solution, but this one is targeted at food businesses. This software lets you run your back-of-house more efficiently while helping you cut back on food costs, reduce waste, track expiration dates, and speed up your inventory with barcode scanning.
Take better control of your inventory with SellerCloud. This all-in-one software tracks your items across all channels, from manufacturing to distribution. Besides managing incoming orders, the tool also gives an alert in case of low stocks.
Cin7 puts your sales channels, stock locations, workflows, warehouses, shipping, accounting, and more in one connected source, so your inventory, warehouse operations, and other aspects of your business can work more efficiently. This tool also offers inventory tracking, barcode scanning, and order processing.
This inventory solution integrates and automates your business processes for improved efficiency, including inventory management. The tool lets you track your stocks with serial numbers and expiration dates across multiple warehouses, use barcode scanners for accurate records, and keep your inventory and accounting records in sync, among others.
Take Better Control of Your Business
Having too much of certain items or too little of high-demand items can bring your business down. That’s why it’s crucial to have an effective system that helps you keep track of your stocks and allows you to employ better inventory planning and control to improve your business management and health positively.
If you realize your inventory got a little out of hand and need to liquidate excess items, check out Surplus Inventory Buyer. We purchase surplus inventory and ensure you get as much money in return. Get in touch with us today, and let’s see what we can do with your excess inventory!