Are you a small scale business owner who is facing difficulty in managing your inventory?
If yes, we will provide you with the best tips to optimize your inventory.
We understand that being in a small business, your resources are limited. So you need to invest logically. Inventory which takes away a big portion of your investment and needs to be handled smartly.
Better inventory management can help you fetch more profits. So, listed below are 7 inventory optimization tips for the small business owners.
- Organize stock room appropriately: The first and foremost thing you should do is to properly organize your stock room. This will help you perform all the processes regarding inventory easily and rapidly.
Keep your stock room neat and clean.
Do not clutter the items in one place.
Keep the new stock of particular item behind the old stock.
Keep all the high-demanded items first and within reach.
Keep all the items sold together in one place.
Use labels for different storage areas.
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Take into account all the safety measures for the products.
…and so on.
- Hire first-rated inventory management software: Choosing the right inventory management software is utmost important. This software will help you perform all the inventory-rated task. It brings automation which ultimately saves time and quickly finishes the job.
It helps in checking stock level.
It forecasts demand of the particular inventory.
It helps in deciding the amount of order to be placed.
It helps in placing the order.
It facilitates tracking inventory from anywhere(cloud-based inventory management software).
It helps in proper barcoding
…..and much more.
Make a list of all the work you want your inventory management software to perform. And then survey the market. Make a list of the inventory software to suit your particular need. Review all and opt for the best one. You will definitely like the way it helps you manage your inventory better.
- Tracking of each procedure: Inventory management is a task which involves a lot of procedures. Pay attention to each and every procedure fully. Check whether it is wisely done or not.
Take accurate stock of inventory.
Provide adequate storage facility for inventory.
Keeping track of inventory sold.
Decide the amount of inventory to be ordered.
..and so on.
Each above-mentioned procedure has a lot of importance. And any loophole in any of the procedure will lead to a loss to you. Be careful and work wisely.
- Manual Auditing: Auditing is one of the processes which is done by inventory software. But after all, it is a machine. You cannot rely on it totally.
It is always advised to do the auditing manually by yourself. You can do it daily, monthly, half-yearly or yearly depending on the nature of your inventory.
This manual stock-taking will help you double check your inventory calculations. It will provide you with an idea about which items have to be moved first. It will also help you keep a track of any damaged or stolen inventory.
- Quality control checks: You need to you stock the best quality inventory to deliver the best to your customers. This will help you gain their trust and goodwill.
You should always run quality control checks on your inventory. It is advised to do it compulsorily whenever new stock of inventory arrives. It can be also be done periodically. It can be done when you are taking stock physically.
You can do it yourself or hire person/team for performing this task.
- Put FIFO into action: FIFO stands for “first in, first out.” You should always apply this approach while selling your products.
This will help you avoid stock from getting damaged, obsolete and out of fashion. This method is a must-do for products which has self-life, such as, food items, plants, organic products, etc.
For practicing this, you need to arrange all your products cleverly. As mentioned above, put the products you have bought recently at the back. Bring the old stock at the front.
- Take into account low- turn stock: Any inventory, left unsold from last 6-12 months is low-turn stock. This period may vary according to the nature of the product you deal in.
Keep a track of low-turn stock and stop adding it. Otherwise, it will lead to waste in time, space and capital. You need to clear this stock by using discounts and other promotional schemes.
Further note that for a few products, a certain period of the year is favorable for sale. For instance, for if you are in garments. Stock woolens in winter and shorts and other summer collection in summer. So, purchase wisely.
Hope the above techniques will help you master the inventory optimization process. And will help you overcome all the inventory related hurdles and grievances. This, in turn, will help you increase turn-over of your small-scale business.