Inventory management is the process of organising your stock so that you know precisely how much you have for sale at any given time. An effective inventory management system will help you decide how much you need to hold of each item and when, keep track of sales trends, manage seasonal peak demands, and minimise stock shrinkage. Stock control can be tricky to master, especially if you’re fulfilling your own orders. On the flip side, creating an efficient inventory management strategy has some serious benefits for your business.
While stock control is an integral part of running any company, it’s even more critical for growing, independent businesses to get it right. With more people than ever shopping online, and ecommerce stores popping up every second, the competition is fierce and it can be difficult to keep up.
The main purpose of inventory management is to save you and your business money by reducing the cost of excess inventory. At the same time, it will help you build customer loyalty by ensuring you’re never out of stock. Some companies overstock certain products just in case, which can be a huge waste of money and staff resources. The opposite can also happen - if you’re not fully aware of your stock levels, you may think you have more of a product than you actually do, which can lead to disappointing and potentially losing some of your customers.
Think of it this way: stock control is one of the pillar processes of your business. If you nail this from the get go, you’ll improve your store’s productivity, save money and have more time to focus on growing your company. Let’s take a look at some simple inventory management tips that will help you reduce shrinkage no matter what size your business is.
The first step to effective inventory management should always be to check what actually gets delivered against what you have ordered from your supplier. It’s easy to assume that the numbers match up, but according to our observations, a good 1% to 2% of stock orders are incorrectly packed. If you just assume that you have the correct amounts, you could end up paying for stock you haven’t received and being short-stocked when you receive a customer order.
This may sound very time-consuming - however, this process doesn’t necessarily need to be manual. For example, Cloud’s goods-in process requires all inbound deliveries to be booked in with our warehouse staff, thus any discrepancies can be seen on our platform in the Non Conformance Report (NCR).
There are often many small changes you can make to your inventory management, picking, packing and shipping processes that can have significant impacts on the efficiency and productivity of your business. Take a step back, analyse your order and fulfilment processes and establish if anything can be improved to minimise fulfilment errors.
Doing so can have a noticeable impact on your bottom line and allow you to grow faster.
If you’d like to talk to us about outsourcing your inventory management and order fulfillment, please get in touch - we’d be happy to discuss your requirements.Alternatively, feel free to get an order fulfillment estimate yourself using our fulfilment cost calculator.