Oftentimes, small business owners tend to focus on generating revenue, hard-to-please customers, personnel issues and raising financing. Unfortunately, many overlook one of the most important aspects of keeping a small business organized: inventory management. Your inventory strategy directly affects your business’ profit margin. When you have inventory that’s not being sold, your profit margin decreases, and vice versa. Using an inventory management system can help you keep track and adjust your strategies accordingly.
Why do I need Inventory Management?
Out of stock items lead to loss of sales and revenue
If an item is out of stock, you may not realize it if you’re not keeping track of your inventory with system that allows you to update your product information as you make sales. Waiting until after a purchase to notify a customer that his or her item of interest is out of stock is not a good business practice, and it often leads to unhappy customers who will be unwilling to return to your business in the future.
Overstocked items lead to wasted money
In order to run a successful business, one must learn how to order merchandise according to demand. If you are housing an excessive amount of a product that isn’t selling, you’re wasting storage space as well as money.
Identify issues before they become insurmountable
If it takes you months to recognize that there is a problem with your inventory, what may have been a small problem in the beginning has likely snowballed into a much larger issue. This means that your company may lose a substantial amount of money due to mistakes that may have been preventable if caught in a timely manner. For example, if one of your employees makes a mistake on a sales order, it is very important that you find out sooner rather than later.
If you’ve been in business for very long, you’ve likely already received calls from customers complaining that they received the wrong product or the wrong amount of a certain product. It happens to the best of us, but if you are tracking your inventory, this mistake will be much simpler to fix. Accurate and timely communication with customers is of great importance in any successful business. Happy customers lead to increased sales, and increased sales lead to increased revenue.
No matter how trustworthy you believe your employees to be, they will be much less likely to try anything sneaky when times get tough if they know that you are keeping a close watch on your merchandise. If you leave room for error, you leave room for theft.
When searching for an inventory management system that fits your business’ needs, be sure to pay close attention to the areas of most importance, which include: SKU recognition services, purchase orders, user friendly importing features, online POS services, visualization, customization abilities and website integration. Check out www.cyberstockroom.com to learn more about an inventory management system that includes these features and more!