As a business owner, you have a lot on your plate. From payroll to managing inventory, there’s always something to do. However, you must focus your efforts on properly understanding your inventory, so you don’t lose money. Here are four common mistakes that business owners make with their inventory that costs them money.
Having Way Too Much
It can be hard to determine what the right amount of inventory will be for each item that you plan to sell. Many business owners fear the thought of not having enough in stock if there is a high demand, so they end up over-purchasing. It’s important to realize that the more inventory you have, the more space you need to keep it, and the more staff you need to mind it. Start your inventory levels small and increase them only with demand.
Not Having Enough Space
If you find yourself in the position where you need to stock high levels of inventory, you need to have a place to safely do so. Many business owners will simply shy away from storing high levels of needed inventory because they don’t have space. This practice leads to lost sales from customers and can decrease customer loyalty. The storage requirements are going to change depending on the individual needs of each product in your inventory. A third-party warehousing vendor can be a great solution for adding inventory space for your products.
Not Satisfying Customer Orders
When it comes to your customers, you want to be able to fulfill all of their orders to ensure they stick with you in the future. However, this can prove challenging to do when you don’t have real-time data about your inventory. Automating your inventory process with barcode technology will ensure that you know how much product you have in stock at any given moment. This way, you never promise to deliver more product than you physically can. This will keep your customers happy and loyal.
You Miss Out On Trends
Depending on the products that you offer, you may find that their demands change throughout the year. If you track your inventory and sales appropriately, you can be ready for trend spikes and declines at specific times of the year. When you’re prepared to deal with these trends, you can order extra inventory to meet demand or not reorder inventory, so you don’t end up with too much expired inventory.
Inventory management is a key component of long-term business success. While you may have focused your efforts away from inventory needs to deal with other areas like marketing, you need to refocus back on inventory. The four scenarios above should be more than enough proof that inventory management is a necessity for your business.
Anica is a professional content and copywriter who graduated from the University of San Francisco. She loves dogs, the ocean, and anything outdoor-related. You can connect with Anica on Twitter @AnicaOaks.