Trying to keep up with inventory in your small business can become a losing battle without some smart organization. The worst that can happen is when you run out of a popular product and have to tell customers you won’t have a new order in for a while. You can run into similar problems if don’t properly record things like SKU numbers, barcodes, or product specifications. This is why inventory management is important.
All of these and more are typical inventory problems for small businesses like yours still in the growth stage. Lack of attention to your inventory can quickly set you off on the wrong foot with a buyer. Considering you’re still trying to create a reputation, not having new products available when you say they will be available can quickly insinuate unreliability.
Here are some tips on managing your small business inventory to avoid confusion while keeping you and your customers continually informed.
Tips for Inventory Management
Tip # 1: Understand Your Product Types
If you are a new business, maybe you are still learning about the four common product types needed to properly manage your inventory. The most basic is an “item”, a product sent to you that doesn’t require special packaging and selling as is on the shelf.
It’s possible that most of your products are like an item. Although you also need to know about an “assembly”, meaning a product requiring assembly in the warehouse before being delivered to you. Plus, you have a “family”, a product with different sizes or other variants.
Another option is a “pack”, otherwise known as a product bundle. These products usually get sent to you in a case pack, then unpacked individually for singular sale.
Tip # 2: Pay Attention to SKU’s and Other Identifiers
A Stock Keeping Unit is a vital part of your inventory management, and it’s your overall identifier for finding a product quickly. However, it’s not the only thing you need to manage your inventory record.
First, it’s important to keep your SKU’s in an internal database to quickly look up an item when it’s requested by a customer. Using an SKU also helps differentiate between a product sold by a competitor.
Don’t forget about using barcodes as well, especially if working exclusively in a brick-and-mortar small business. These are usually known as UPC numbers that you scan to quickly locate a product for a customer.
Remember to put together a system listing all product specifications. This should include product names, the SKU/UPC number, description, color, size, price, weight, and dimensions.
Tip # 3: Study the Key Metrics
Tracking customer interaction and customer performance is just as important as keeping an inventory database of what you have. Put together a reliable metrics platform showing every detail of what’s been sold, including in another store if you have one.
You also want to know who buys your products so you can better target your inventory to a particular demographic.
Real-time inventory metrics are becoming more popular now to make smarter and faster decisions on what to replenish and when.
Tip # 4: Perform Daily and Monthly Audits on Inventory
Auditing your inventory on a daily or monthly basis is the smartest thing you can do to avoid any discrepancies. Without an audit, some of your inventory could go missing, become stolen, or damaged. Not keeping up with what happens to your inventory could create chaos in your records and major losses due to too much second-guessing.
It’s usually acceptable to do this at least quarterly. Regardless, when you start getting loads of orders daily, it’s best to audit every business day. Doing so helps you speed up product deliveries to your newest customers.
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