Traditional businesses that only have a brick and mortar are (almost) a thing of the past. Nowadays, most of the time people expect the company to have an online platform, if only to check what they are offering before visiting their physical location.
As a business owner, you’re probably trying to keep up with these changes as you try to raise your company to new heights. But there’s more to this than meets the eye. Small business inventory management is a process that runs in the backstage and sometimes it is not given the importance it deserves. It plays a crucial role in running a company, and it also should be kept up to date with the changes that are presently taking place in the market. So, let’s see how you can modernize your inventory management system.
Adopt a Smart Inventory Management System
Some of the oldest approaches to inventory management argue that you should minimize holding and ordering costs and keep only the bare minimum in stock. In particular, we are referring to the Economic Order Quantity model (EOQ).
This classical model attempts to mitigate costs, which is understandable but is based on the assumption that the demand for a certain product is constant over the year. As a small business owner, you may know that this view is outdated and generally does not apply. The demand for a product can shift greatly over the year, not only according to some predictable factors like seasons and holidays but also some unpredictable ones, like new trends, media influence and so on.
Furthermore, even if you are starting out small, you probably expect to grow your business and expand it to other channels. So if customer orders suddenly boom and you are unable to keep up with the demand due to inventory problems, it may be a squandered opportunity.
So, adopt a smart inventory management system that can keep up with the oscillations in the market. A good, simple system allows you to quickly respond to swift changes in demand and not leave your customers dissatisfied. If the system uses accurate and dynamic algorithms, you don’t need to overstock, either; it will make a prediction and recommend the optimal levels of stock you should keep. One good example of this is the DataQlick inventory management software. It calculates your business’s optimal inventory levels every day, and there is even a DataQlick mobile inventory app do to all of this from your pocket.
Synchronize Inventory across Multiple Channels from a Single Place
We’re in the 21st century, in an era of smartphones, the cloud and the Internet of Things. If your business is to really prosper, you probably should invest in multi-channel selling. Of course, some of the most popular platforms to sell on include Amazon, eBay, Shopify, and Magento. But more importantly, adding this whole new layer to your brick and mortar business brings with it an additional challenge, which is to keep managing your inventory properly and effectively.
If your inventory management software is outdated or inefficient, you may find it very hard and time-consuming to keep track of what is going on in the different conduits of your business. Furthermore, the data that the system provides you may be inaccurate and have missing or double entries. This, in turn, may lead to understocking or overstocking due to lack of knowledge and precise information.
Modern inventory management systems let you control stock levels for all your channels from a single place, which eliminates the headache of tracking every single channel individually. Also, you are able to easily identify what channels are selling the most. This is important not only for inventory management, but also as part of your business’ strategy and in planning for the future.
Keep Your Purchase Orders in Check
As you are probably aware of, vendor management is also a tricky part of running a business. It is important that you maintain good relations with your vendors because they are the source of it all. If you gain the loyalty of a supplier you might be able to negotiate better contracts, be provided a better service and even receive some advice for your business plan.
As such, you’ll also want to do your part and pay your vendors on time. If you have an old inventory management system, managing payments and orders to multiple vendors can be a hassle. Luckily, recent inventory management systems allow you to create purchase orders with only a few clicks, and have a quick overview of cleared and pending payments.
Hopefully, we’ve been able to show you how important it is for your business that you keep your approach to inventory management fresh and modern. It must evolve at the same pace that your business does. Your customers will benefit from it, and so will you.