In today’s competitive world of online shopping, making sure you have the right amount of products in stock is really important if you want to make more money. Even if you think your current way of managing your inventory is okay, making a few changes can make a big difference to how much profit you can make. Just imagine being able to accurately predict when and how much you’ll sell, making it much easier to keep track of your inventory. With my experience in IT, business, and management, I’ve learned that managing your inventory well is really important for making more money. As your business grows and you gather more data about your inventory, you’ll be able to make better guesses about how much you’ll sell in the future. You can think about things like how your business is doing, what people want to buy, if people feel good about buying things, and when you’re going to have sales and promotions. Managing your inventory won’t solve all the problems your small business might have, but it can definitely help with a lot of them. In this blog post, I’m going to share five practical strategies, plus a bonus tip, to help you get better at managing your inventory. So let’s get started and see how you can make your inventory management even better in the next year.
What is inventory management?
Improving how businesses handle their inventory is really important if they want to run smoothly and take advantage of opportunities to grow. This involves various things like ordering, restocking, receiving, storing, and fulfilling orders. To manage inventory well, it’s crucial to collect and analyze important data, such as how much is being sold and how much stock is available. This information helps predict future demand and sales.
By using good inventory management practices, businesses can make the most of accurate and useful information. This helps them handle orders efficiently and get ready for future demands. To help you improve your inventory management, we’ve chosen five important practices that can lead to long-term success and growth.
1. Set Minimum Stock Levels
Finding the right balance between carrying costs and meeting customer demand is a challenge in customer satisfaction and inventory management. Let’s consider a scenario where Suzie from Savannah wants a red polka-dot dress but is disappointed to learn her size is out of stock. To make matters worse, the manufacturer sews the dresses after ordering, so Suzie has to wait seven weeks. Unfortunately, this situation has caused the loss of a valuable customer.
However, it’s important to avoid tying up too much money and space with extra red polka-dot dress inventory. Striving for the perfect inventory level may seem impossible, but implementing a minimum stock level system can help. By setting a minimum stock level for each item, you can place new orders before running out of stock. Determine this level by analyzing sales data and how long it takes to get new inventory. For example, if you sell an average of one polka-dot dress per size every week, it’s smart to order new dresses when you have seven (or even eight) in stock. This way, you’ll have new stock before you run out, ensuring a steady supply for your customers.
2. Understand Your Supply Chain
Efficient management of inventory is really important for running an eCommerce business smoothly. When you have a good system in place, it means that the products you sell can be easily bought and delivered to customers without any problems. But sometimes, unexpected things can happen that mess up your inventory management.
Let’s say there’s a dress with red polka dots that becomes really popular on the red carpet. Suddenly, everyone wants fabric with red polka dots, causing a big increase in demand. This can make it hard for the people who make the fabric to keep up, which might cause delays in getting more fabric and possibly even running out completely. And if there are storms or other bad weather, it can make it even harder to get the fabric to where it needs to go.
To deal with these kinds of problems, it’s important to understand how your supply chain works. At Red Stag, we know how important this is for keeping your inventory fresh and running smoothly. That’s why we work closely with our customers to look at the data from their past inventory and come up with good strategies for how much to order and when to reorder.
By using this data-driven approach, we help small businesses avoid problems with their supply chain. Our goal is to help you have just the right amount of inventory so that you sell a lot without having to spend too much money on keeping the inventory. This way, you can be proactive and make your eCommerce business a success.
Having a good and organized supply chain is really important for running an eCommerce business well. When you understand how it all works and use data to make decisions, you can avoid problems, be ready for unexpected things, and make sure your inventory is managed smoothly. At Red Stag, we want to work with you to reach these goals and make your eCommerce business as good as it can be.