If you’re going to have a successful business that involves buying and selling of various items, you’ll have to be able to successfully manage an inventory. It’s important to be able to identify and manage the flow of items in and out of your inventory stocks. Not being aware of your inventory and various factors like what is available, where items are located, or where it can be purchased by customers can lead to problems in efficiency over time. Take charge of your inventory control by using these seven important tips.
Make Sure All Your Inventory is For Sale
Items in your warehouse that are available but not listed for sale cannot create revenue. If you have a wide variety of stock in your warehouse that isn’t listed for sale, this is going to be a problem in the future when you’re running out of room for items that are selling.
Know Your Lead Time
Lead time is the amount of time between when you order an item and when it arrives to your warehouse. Many sellers love the idea of their business having “just in time inventory,” but this leads to a general lack of awareness and a seller can run into the possibility of running out of inventory. Keep a proper awareness of lead times in order to judge when you will need to restock your inventory, and to make sure that your customers will get what they want when they want. This is a major aspect of warehouse inventory control and should be a high priority in terms of general management.
Know How Much You’re Going to Need
Consider using a buffer stock of items in your inventory that have a high sell rate. If you’ve been averaging 1,000 orders of a specific item in your inventory for the past six months, consider ordering 2,000 of the item for the coming months. Not only does this negate the chances of an item going out of stock, but the recurring extra inventory can be rolled over to the next month.
Use Multiple Selling Channels
Many businesses enjoy a healthy relationship with one primary distributor. This, however, does not lead to new selling alleys being opened. Having multiple selling channels enables a business to distribute a larger amount of inventory. Consider all of the possible areas to distribute your inventory and make sure that they are cost-effective and income generating markets. Some marketplaces are more competitive than others, and it’s important to do some research to see if your stock is a viable selling option depending on the market.
Take Advantage of Automation Technology
Managing hundreds of physical spreadsheets is an archaic and daunting task. There are a wide variety of services and programs available for warehouse inventory controlthat don’t involve the constant updating and editing of spreadsheets. By automating your inventory system, you can save a huge amount of time and can lessen the load on inventory management and focus on more potentially revenue gaining aspects of management.
Track All Inventory Costs
As an inventory manager, it’s crucial to realize that the cost of inventory is not just the original price of the item. There is also the cost involved of transporting the item to your warehouses, distributing them, and the cost of housing the items in your warehouse. There is potential money saving opportunities available by not purchasing inventory that will go out of fashion or is no longer in demand.
Don’t Hold On to Old Inventory
Inventory that is purchased and not sold for over a year will most likely not be of use to your company in the future. Consider getting rid of this inventory and don’t consider the amount of money that was lost purchasing it months ago. As a business owner, there is always an idea or piece of inventory that doesn’t sell the way you expected it to sell. Be aware that you made a mistake and find a cost effective way of getting rid of this stock, then look towards the future.