If your business sells things, whatever they may be, then you’ll have inventory to deal with in your day-to-day operations. Inventory management is important for businesses of all sizes, but it can particularly be a challenge for small businesses and anyone selling online from their own home. Whether you need inventory management software, commercial storage units, or just a few tips on how to manage your inventory effectively, this article will help you get your head it all.
The importance of good inventory management
The importance of inventory management cannot be overstated. If your business sells things, then your inventory is your livelihood. Your business won’t make money without it. When you manage your inventory properly you can complete orders when they are made, which satisfies your customers, making them more likely to buy from you again and recommend you to others. If you let your stock fall too low, then it will take you longer to complete those orders, which could lead to a bad reputation.
Proper inventory management also prevents your stock from piling up too much. The more excess inventory you have, the more difficult it will be to store. This can cause logistical problems and higher costs related to storing your inventory. Overall, good inventory management makes your business more profitable.
SKUs are key to effective inventory management. This stands for Stock Keeping Unit and is an identifying code for all of your products. The SKU identifies the specifications of that product, including price, color, style, etc. Having SKUs for all of your products makes it easier to track your inventory so you know when to reorder. It also helps you retrieve a product when someone makes an order, making order fulfillment more efficient.
How/where to store your inventory
One of the main problems small businesses face is knowing where to store all their inventory. If you’re running your business from home or from small business premises, then you probably don’t have much space to store all your products. You don’t want to run the risk of your stock levels becoming too low, so you need to find a suitable storage solution.
Here are a few options…
Storing inventory at home
If you’re starting up an online business, this will probably be your first solution. Maybe you have space in your home or garage to store your products. This solution can quickly become redundant as demand rises and you need to store higher levels of stock.
Hiring commercial storage units
If you need more storage space away from your home, then renting a commercial storage unit is a cost-effective option. This gives you a secure location for your inventory or excess stock levels that you can have retrieved when you need it.
If you don’t manufacture the products yourself, then dropshipping is another viable option. With this e-commerce model, you purchase the product from a supplier whenever an order is made. The supplier will handle the product for you and ship it to your customer. This way, you never have to handle the products yourself. This method comes with its own pros and cons.
Software to help you with inventory management
To make inventory management easier for you and to improve its efficiency, there is a lot of software available online designed to help you with inventory management. Some of these are tailored specifically to small businesses, so the software is designed with your needs in mind.
When Excel is too basic and an enterprise software solution is too pricey, here are a few inventory management software options for you to try.
Getting a handle on inventory management for your small business is essential for growing your business in size and profitability. Hopefully these tips have put you on the right track.