One of the most effective ways for any business to increase profits is simply to boost inventory management. With the right inventory management system, you’ll spend less on storage space, reduce profit losses from old stock, prevent overstocking, and simplify job costing.
However, even if you think you have a good system in place, a few adjustments can maximize inventory management and profits to a whole new level.
These practical inventory management solutions will ensure you can accurately predict future sales, improve storage use, and prevent costly losses for your business.
Ways To Boost Inventory Management
Use Barcodes To Categorize Items
Implementing a barcode inventory management system is the best way to monitor stock levels.
Beyond this, barcodes also make it easier to categorize and identify items. These systems use hardware and software to organize inventory, so keeping an eye on inventory is easier than ever.
Set Minimum Stock Levels
If you don’t have enough stock, you could be losing customers along the way. Instead of risking this, it’s essential to determine minimum stock levels. The goal is to have enough stock without having too much.
The best approach is to rely on sales data to determine your minimum stock level requirements on each item. Next, automate supply orders to suit your minimum stock needs.
Get Rid Of Slow-Moving Items
If you have particular products in your inventory that sell off notably slower than other products, consider getting rid of these items altogether. Slow-moving products are harder to sell, and you won’t want to be losing profits to clearance sales routinely.
Instead of keeping hard-to-sell products, run a discount sale to get rid of these products and consider retailing a different product in its place.
Reduce Inventory Shrinkage
Inventory shrinkage refers to items that are lost, damaged, or broken. Inventory management can get tricky when it comes to shrinkage because you might assume you have items ready for a new order when in fact, the item has been damaged.
The best approach to reduce shrinkage is to organize inventory properly. It’s important to store items securely to prevent damage. You might need to invest in storage cushioning for fragile items or consider buying sturdier shelving. Even so, it’s wise to budget for shrinkage by keeping a few more items, just in case.
Prep For Demand Spikes
Suppose sales suddenly skyrocket. You won’t have enough on hand to get orders out in time. Instead of overlooking the possibility that your products sell out, it’s essential to prepare for this kind of situation.
Because there won’t be enough time to ship in more products, you’ll need to already have a backup plan in place. Perhaps you can find an alternative supplier in your area to use for such instances.
In addition to this, it’s also essential to understand your supply chain so that you can make adjustments should you hit a crunch with high sales numbers.
Improving inventory management is a surefire way to prevent financial losses, reduce storage costs, and increase sales. So, before you start promoting your business online to increase sales, consider increasing business profitability through enhanced inventory management.
