Letting inventory management slide is a widespread occurrence when you sell things online. But if you know the basics of managing your inventory, you can avoid problems that can cost a lot of money and make your store rush to fill orders. With a few essential parts and inventory management software, you’ll be well on setting up an inventory system that runs smoothly.
Tips To Keep Track Of Your Online Business Inventory
Here are some of the most effective tips to follow to Keep Track Of Your Online Business Inventory:
Estimating Your Online Store Inventory
No matter how long you’ve been in business or how new your online store is, you need to come up with decent numbers when placing an order of items for stock. Since you’re not a seer, you can’t know for sure how many products sell in advance, so you make a rough estimate. You can use sales from the last three to six months or longer to make your estimate.
It’s easier to make predictions when you use the:
- Rate of growth right now
- Previous year’s sales
- Market trends
- Contracts or subscriptions already in place
- Advertising that’s coming
The key to ordering the proper inventory is to have little or little. If you order too many items, the ones that don’t sell might sit in a warehouse and cost you money that could be better spent elsewhere. If you order too few things, orders might cancel orders because you need more. This could hurt the reputation of your store. With good inventory management, making better predictions over time should get easier.
Utilizing the Par Inventory Method
Par levels are an essential part of inventory management. They tell you how much of each type of product you need in stock. Par levels change depending on the small amount of inventory you order and how much of that sell at any particular time. Establishing a system that automatically keeps track of this information would be best.
Think how difficult it could be to maintain track of many inventory items by hand every month. Suppose you need to keep track of par levels. In that case, you might run out of a popular product, making customers angry and making them promise never to buy online with you again. To escape this, create a point to check par levels every several months so you can act quickly to add more stock before a sudden increase in sales.
Follow The “First-In, First-Out.” Rule
As you keep ordering more items to add to your stock, your order items may end up in the back of the warehouse. This can cause products to go wrong or lose customer value, leading to lost sales. The first-in, first-out (FIFO) rule is a simple way to ensure that the items ordered first are sold before the items ordered more recently. This is a rule that many warehouses follow, but you should double your suppliers to make sure that the oldest things are moving out of the gate first.
Be Prepared For Problems With Inventory
Problems with your stock can sneak up on you. If you are still getting ready, it might be hard to fix these issues when they’re out of hand. Let’s say you put your money into a sure winner that doesn’t sell very well. How would you get rid of that inventory that’s not moving? What do you do when a provider runs out of goods or services during the holiday shopping season? Think about everything that could go wrong with your inventory and plan for each possible situation.
Sort Inventory According to Popularity
When you have items that don’t sell, it makes sense to stop keeping them in stock. This makes it vital to maintain track of things using stock-keeping units (SKUs). It also helps you figure out how to eliminate products that sell very infrequently, like by having a sale. On the other hand, ensure you have enough of your most popular items, especially if you think customer demand will increase.
Think About Other Storage Options.
Think about putting some of your products in regional hubs to get orders to your customers faster. You can work out a storage deal with a national chain that has warehouse space. As you organize your warehouse, making sure that popular items are easy to get to can reduce the time it takes to pack and ship.
It’s a good idea to do inventory audits regularly using effective inventory management apps that can make detailed reports. You may think that one audit a year is enough, like many business owners. But doing audit reports every month or every three months can help you know more about how your inventory is doing.
Audit reports can also help with planning and figuring out how to handle risks. With real-time inventory management software like QuickBooks Online, you can always know what is going on with your stock. What the better inventory software does:
- Gives each item a barcode.
- When a worker scans that QR code, noting that an item has been taken from a warehouse shelf, the inventory records are updated.
- When you run out of a product, your website is updated immediately.
- Offers tracking details during shipping so customers know when to expect shipment.
Inventory software can also give you helpful information about your sales. In the same way, it can let you know when you are running low on a specific product.
Check Your Inventory Budget
It’s good to collate your inventory numbers with your budget and make changes as needed. The prices of products you buy often have gone up or down, which could hurt your budget. Make sure your planned stock order will only cost what you can afford. When you look at your inventory and sales budget together, you may need to move money from one category of products to another.
Manage The Costs Related To Your Inventory
Using an intelligent inventory control system is an excellent way to reduce the costs of carrying your inventory. Still, there are other things you can do to keep costs in check. If you have results that you can’t market, you could ask your supplier if they will take them back.
Some sales offer significant discounts on items that could be selling better. You could even hold markdown or receivership sales for product lines you plan to take out of your product catalog completely. Some smaller companies also find it expensive to donate products to nonprofits and take a tax deduction to offset losses.
You could also get better payment terms from your suppliers and lower shipping costs by setting up drop shipping. This means manufacturers ship directly to your customers, saving your business money on processing fees.
Managing and keeping track of your online business inventory can be a little difficult. So, there were some of the top tips to follow and keep track of your business inventory.
Hope this was helpful!