Next to payroll, inventory is a shop owner’s largest controllable expense. So why aren’t more small businesses talking about it?
When your goal is to earn a profit, you wouldn’t take money out of the bank and put it back on your shelves, would you?
Well, we hate to break it to you, but if you are a retailer or wholesaler who does not have a strong inventory system in place – you might be doing just that.
Let’s put it this way: When optimizing your inventory, you want to keep enough items on your shelves to do two things: meet your sales & grow your sales. Any more than that is just not helpful for maximizing your profits.
There are other elements of a strong inventory management system beyond knowing how much and when to make purchases. Systems like Bloomforth’s Omnichannel system for retailers and wholesalers assist with automating certain functionalities of your inventory so that your job is easier.
Here are some questions to ask yourself to know if your inventory management system is working for you:
- When your inventory is low, how many steps does it take you to receive an alert, generate an order, pay an invoice, and update your inventory upon arrival of your product? Automating processes like this save you time and money while making your business operations seamless.
- What is the current dollar value of the current inventory that’s sitting on your shelves right now? Knowing the value of your product keeps you motivated to sell it and prevents having to “cut your losses” in order to move it when it’s time for something new.
- How many weeks of supply (WOS) do you have sitting in your store right now? How many WOS do you need to meet your customers’ demand? Knowing how long your inventory lasts is essential in helping you reduce frequent shipping costs AND making sure you always have what your customers want. The biggest mistake retailers and wholesalers make is sitting on too much inventory, and most experts say businesses should aim to have 4-6 WOS ready to sell at any moment. (If you sell fresh produce or other products with an expiration date, you will have to make adjustments.)
- How long does it take you to enter inventory? Bloomforth’s barcode scanner tool helps reduce the amount of time it takes for you or your employees to update product counts, saving you time and money.
When you’re just starting out, the “spaghetti at the wall” approach to inventory is sometimes necessary to find exactly what works for you. But, it’s important to track your methods and record your results along the way. A strong inventory management system will help you do just that!
So, now it’s time for your challenge: Ask yourself these four questions today and “take stock” of how you can streamline your efforts and work smarter (not harder) to implement wise inventory practices.
We know you can do it. And if you need us, we’re here.
Click here to register to learn more about Bloomforth for retailers and wholesalers.