No matter the size of your business, the inventory you keep matters. How you monitor and manage this inventory is important too. Effective inventory management is essential for productivity, but it is also essential in helping you reach those sales targets and goals.
How to Effectively Manage Inventory in Your Business
If you are not managing the inventory in your business, you are effectively losing money—and wasting time and additional resources. With that in mind, here is a guide on inventory management for your business.
Track Your Data
You need real-time information and real-time data to manage the inventory that you hold. If you are not tracking data you are not seeing patterns that are potentially emerging.
This may mean that you are purchasing items or products that are going to clog up your inventory and end up costing you more money in the long run.
Tracking your data and keeping logs and spreadsheets will help you see quickly and clearly what is trending. When you can track data you can anticipate your needs for the coming months, and you can ensure you purchase the best products (in the correct quantities).
Monitor All Selling Channels
Your business may be selling inventory and products over multiple sales channels and outlets. These of course will all need monitoring. For effective multichannel inventory management you need to use the right tools, and you need to ensure that all of your products and barcodes are connected.
When this happens inventory and stock can be quickly updated, which will ensure you keep the out-of-stock messages to a minimum, and it will ensure that customers can purchase what they want from the channel they want.
To effectively manage inventory, you will have to track and analyze your sales—you will have to see where sales are happening, and what the average order is.
When you take the time to regularly analyze sales you see which items in your inventory are performing well (and which are underperforming).
Without analyzing sales on a regular basis (monthly, for example) you will struggle to keep track of what is hot and moving, and what is stale.
To make the most out of sales figures and data you need to ensure consistency in terms of always looking at your data and figures in the same way and at the same point each month.
Don’t Be Afraid to Retire Items
When you are managing the inventory in your business it can be difficult to make cuts, and it can be especially challenging if you have stocked an item for a while (or sold it well over the preceding months).
Retiring items and keeping your inventory fresh and appealing are important processes. If you are not retiring items, you are not going to introduce anything new, and this can dampen any future sales you expect to achieve.
To take a positive view (or stance) on retiring items you must see the positives on offer: think about the better products or items you will be able to replace the retired item with; see the benefits that are on offer (both to you and your customers).