Inventory management should be the next thing on your agenda now the holidays are behind you. Most businesses start the new year with a lot of end ties to fix up and mess to clean up, so with that being said, there is no better opportunity than the new year to review and improve your inventory management practices. Effective inventory management is crucial for any eCommerce store to keep track of orders, increase profits, effectively manage its resources and meet customer demand. Still, it requires experience, knowledge, and skills to be done right. In this article, we’ll share four tips to help you start the new year on the right foot with your inventory management. By following these strategies, you can ensure your inventory is well-managed and aligned with the needs of your business and customers.
Conduct an inventory audit
An inventory audit aims to verify the quantities and values of a company’s inventory. An inventory audit involves counting the quantities of each item and comparing the results to records. Any discrepancies should be investigated, and the records should be updated. Inventory audits are essential to businesses for several reasons.
- They make sure your records are accurate. Discrepancies in an inventory audit are not uncommon, but when not picked up on, they may repeat themselves and cause substantial damage to business operations. When a business picks up on inventory shrinkage, it can signal problems such as theft, error, and other causes, events that require immediate attention.
- Allow you to make better and more accurate improvements. For example, an inventory audit can help to identify problems in the inventory management process, such as excess or obsolete inventory, and suggest ways to improve the process.
- Reducing carrying costs. An accurate inventory can help a company reduce its carrying costs, such as storage and insurance, by ensuring it only holds the needed stock.
Implement a system for tracking inventory
The correction management of your business, including an accurate insight into your inventory at any given time, is crucial to business success and growth. With the right inventory tracking system in place, you can manage your inventory successfully and lower expenses. Here are a few benefits of implementing an inventory tracking system.
- Helps your work more efficiently. A good inventory tracking system can help you save time by automating tasks such as reordering and looking for items you have no idea where they are and lets you focus on other activities that need to be done.
- Improves inventory accuracy. By keeping track of what you have in stock, you have a better idea of what’s available and avoid overordering, saving unnecessary spending.
- Less overselling. An effective tracking system gives you a better idea of what’s in stock and on backorder, ensuring you don’t oversell items you don't have available.
- Increased profitability. By knowing what you have in stock and how quickly it is moving, you can make informed decisions about pricing and inventory levels, which leads to a higher inventory turnover and increased profitability.
- Better customer service. With accurate inventory information, you can provide better service to your customers. Happy customers are more likely to buy again and become loyal customers.
- Save other costs. Stock costs money, but extra fees are also involved, such as handling, storage, transportation, insurance, and the list goes on. The more accurate your stock levels, the lower these extra costs.
Outsource your warehousing
When it comes to warehouse outsourcing, the benefits are pretty much endless and have a significant impact on the operation of your business. So whether you are importing, exporting, or a bit of both, warehouse outsourcing is a good idea, and here's why.
- A way to save costs. By using an external storage facility, you will spend less than managing your own facility, as you only pay for the space and services you use. In addition, with outsourcing warehouse space, you avoid all costs related to building, renting, management and staffing, making it a much more cost-effective solution.
- The most flexible storage solution. Outsourcing your storage allows you to scale up or down easily as your needs change without investing in additional physical space. For example, if you are going through a quiet period and decide to reduce inventory volume, you won't have to pay for extra space you won't be taking up.
- Convenience. A third-party logistics (3PL) provider, such as ehouse, often offers additional services such as packaging, pick-up, and delivery, saving you time and a lot of effort.
- Professional guidance. A storage provider may have specialized knowledge and experience in areas such as climate control, security, and inventory management, which can help ensure your items' safe and efficient storage.
- Less risk. Using a flexible storage provider can help transfer some of the risk associated with inventory storage, who may have insurance and other safeguards in place.
- Focusing on other business demands: Outsourcing storage will allow you to put your time and energy into other parts of running a business, such as growth and innovation. Whether importing or exporting, delegating your warehousing will remove the stress many new businesses experience in handling inventory.
With a storage facility like ehouse, you have innovative and flexible storage units adjusted to your size and scale. Ehouse requires little commitment as you are paying for your storage on a monthly basis. If any changes need to be made, such as scaling up or down, they will also accommodate to your business needs.
Analyze your sales data
Analyzing your data will provide your business with a beneficial tool to improve inventory management. Sales data provides some handy insights into your business activity, such as which products are the most popular and in the highest demand, identifies trends and seasonal changes, and helps determine correct pricing and promotions. Here are a few ways in which analyzing your sales data will help you with inventory management:
- Identifying popular products. By analyzing your sales data, you can determine which products are in higher demand. This information is very valuable as you will need to make sure that you have sufficient stock to meet customer demand.
- Identifying sales trends. Analyzing sales data allows businesses to pick up on sales trends within their store due to seasonal changes or other external factors. This information helps businesses forecast future demand and plan inventory accordingly, avoiding running out of stock or overstocking.
- Identifying excess or slow-moving inventory. It is not uncommon for businesses to experience slower activity with specific products. However, often the slower activity is not always picked up on straight away, and it is sometimes only noticed when it's too late. By analyzing sales data, a business can identify which products are not selling as well as others and combat the problem accordingly. In addition, this information can help your business learn and develop ways to improve the sales of that item, such as discounts or promotions.
With ehouse’s OS, they can connect directly to your eCommerce storefront, whether for multiple stores or just one and give you the right business insights and tools to help your business grow and develop. Based on this information, you can create a more accurate business plan, including stock orders, seasonal changes, sales trends, and other information affecting your store's profit.
Following the holiday season, effective inventory management is crucial to starting the new year in the right direction and recovering from the chaos it caused for many online stores. Whether outsourcing or introducing an inventory management system, these tools are essential in creating a more accurate business plan, increasing profit, and having a lot more successful 2023. Outsourcing your logistic demands to a 3PL provider, such as ehouse, will not only save time, energy, and money, but you will also have the confidence knowing that you are in expert and professional hands. Reach out to ehouse’s team today to find out how you can improve your business's inventory management this year.
