Inventory Management Tips for Small Businesses
To help any business refine their inventory management processes we have compiled a few inventory management tips to help get even those brand new to handling stock, heading in the right direction.
Understanding what you are expected to sell in the upcoming weeks or months is the foundation of effective inventory management. This is most easily done by looking at previous sales history for the same periods, if you have it available, as well as seasonal trends and considering any upcoming promotions. From this you will be able to easily identify what products need to be restocked and how much more or less of certain products you need to match your predictions.
FIFO stands for ‘first in, first out’. This approach is ideal for businesses selling perishable goods, as it ensures that no stock is lost to expiration dates. This management method involves selling products in the same order in which they were purchased or created, and restocking from the back of the shelves to the front.
POS (point of sale) software can play a huge helping hand in inventory management. Most POS systems now have built in analytics software, and some even provide real-time figures for continuous stock management. Through a POS system, inventory management is almost entirely automated. When a product is sold, the system will automatically update you stock levels so you are aware how much of certain products you have sold and when you need to restock.
Once you have refined an inventory management practice or routine that works for your business, it is important to reinforce this and make it a standardised process. This will ensure consistency in inventory management regardless of the season, product or member of staff in charge of management for that day.
Even if you have decided to utilise inventory management features on your POS system, manual auditing is also good practice to ensure that stock levels on your system are accurate. This only needs to be done periodically if you are already using a POS inventory management system. Many businesses choose to do this at the end of the year.
Many businesses, particularly brick-and-mortar shops often choose to rent a warehouse or other storage space to store their inventory. With dropshipping, businesses can order their stock to be delivered straight from the manufacturer to the retailer or even straight to the customer. Drop shipping only requires an internet connection to set-up and makes storing and managing stock levels much easier, cutting out the middle-man in the process and making the restocking process faster.