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What is inventory management?
You’ve started a new business, and you’re keen to go. You have lots of products that you’re eager to sell, it’s just a case of finding the customers to buy them. Essentially, the things that you’re selling are your inventory. You have a stock of them, and you ship them out to customers when they make a purchase.
So, inventory management is the process of looking after all of these items. You have to ensure you have a good supply of them and keep track of inventory levels.
Why is inventory management important for startups?
Inventory management is important for every single business of any size. However, it’s particularly important for startups as you need to make a lot of money to stay afloat. Likewise, you also need to avoid wasting money.
Good practices will help you maintain a steady inventory level where your bestselling items are always in stock. If you aren’t managing your inventory, you will easily run out of stock. Now what? You can’t make any money as you have to wait for items to come back in stock before selling them. Consumers quickly become annoyed that everything has sold out, so they won’t be back again.
Instantly, you’ve missed out on sales and lost some potential customers. If you had a good management system in place, you will be notified when certain things are running low in stock. From here, you can quickly order some in to keep the stock levels high and ensure your customers get what they need.
Furthermore, inventory management helps you save money by not wasting it on items that don’t need to be replenished. Let’s say you sell two products – one sells 50 units a month, the other sells 50 in a year. You can afford to keep the stock levels low for the second item because there’s less demand. So, you don’t have to pay for a huge amount of stock or to keep replenishing it month after month!
In essence, you spend your money wisely and keep customer satisfaction levels as high as can be.
How do you manage your inventory?
There are two main approaches, one of which is far superior to the other. The traditional approach is to manually look through receipts and count up your stock every day. Some companies still do this, but it’s so time-consuming. Instead, one of the best POS features of modern times is an automated inventory management system. Effectively, your POS is connected to your stock levels. You are then notified when levels are dropping low, and you can also just check them whenever you like. It saves so much time, is so easier for you to manage, and helps you stay on top of things.
All in all, inventory management is a key aspect of your startup. Many small businesses struggle to stay afloat because they aren’t managing their inventory. Don’t let your popular products sell out and take weeks to be replaced! Don’t waste money buying huge scores of items that aren’t in demand. Learn how to manage your inventory and your business will improve.