Budget-Friendly Inventory Management Tools for Small Business
By Marcus Lansky at https://abilitator.biz/
Whether you’re running a retail store, a manufacturing facility, or a warehouse, inventory management is likely a constant challenge for your business. That’s especially true if you’re a small business in the early stages of growth. However, even small businesses on tight budgets have options for better inventory management.
4 Common Inventory Management Mistakes
How do you know when it’s time to upgrade your company’s inventory management practices? If you’re regularly encountering these common inventory mistakes, you’re due for a change.
Ordering too much inventory throws a wrench in your business’s cash flow. In addition to the upfront costs of purchasing inventory, overstocking leads to higher holding costs as products sit on shelves longer before being sold. If you purchase more than you need before the end of a product’s lifecycle, you’ll have no choice but to markdown items and accept lower margins on superfluous stock.
Avoiding overstocks is important for optimizing your company’s inventory management, but being too cautious brings its own set of problems. When a business doesn’t have an item on the shelves, customers won’t wait for a restock. While some customers buy a substitute from the same retailer, Retail Dive points out 40% of U.S. shoppers opt to buy elsewhere or cancel their purchase.
In addition to increasing labor costs as workers search for misplaced items, poor stock management slows order fulfillment. That’s bad news for businesses struggling to compete with the speedy shipping offered by retail giants like Amazon, especially as the delivery experience is consistently cited as one of the most important factors in customer satisfaction.
Only counting inventory once a year
It’s easier to avoid inventory mishaps if you know the current state of your stock. However, if you only perform a physical inventory once a year, you won’t discover problems until it’s too late. Infrequent counts also make it harder to identify patterns and pinpoint issues in your inventory management practices.
Affordable Tools for Small Business Inventory Management
Avoiding costly mistakes requires infrastructure that improves the accuracy and efficiency of your business’s inventory management practices. While many small businesses still rely on Excel spreadsheets or pen-and-paper stock books to track inventory, manual inventory is both labor-intensive and error-prone. While it might save money in the short-run, relying on manual inventory costs small businesses more in lost sales and labor than it saves.
That’s especially true when you consider the affordable inventory management tools available to small businesses today, like these.
Upgrading from manual tracking to a barcode scanning system is a no-brainer. Barcode scanners turn inventory management into a highly-accurate paperless process that takes a fraction of the time of manual inventory. With an efficient way to track inventory, performing regular inventory counts becomes feasible, allowing for greater accuracy in reporting and forecasting.
While there are high-end barcode scanners on the market, small businesses can get started with a handheld scanner for under $200. That’s a small price to pay for the benefits this inventory management system delivers.
Inventory management software
You’ll get more out of a barcode scanning system when it’s paired with inventory management software. Inventory management software lets you dig deeper into product data and sales trends. With it, you can monitor stock levels, expiry dates, and lead times to determine the right time to reorder and analyze sales data to make smarter purchasing decisions in the future.
Full-fledged enterprise resource management software may exceed a small business’s needs — both in features and price — but Ordermentum explains that cloud-based inventory management software like Tradegecko or Zoho Inventory is affordable and scalable for a growing business.
These tools may not eliminate every inventory management frustration in your small business. Even with automation, managing inventory still requires some degree of human touch. However, by improving the accuracy and efficiency of your small business’s inventory management practices, these tools will help you avoid costly errors and scale your business profitably.
You may also be interested in this article “Improve your demand forecasting with machine learning“
Image via Unsplash
About Marcus Landsky: Author of – Be Your Own Boss: The Ultimate Business Ownership Guide for People with Disabilities.
In addition to helping me with my physical challenges, the people close to me made me believe in myself and my own abilities. They weren’t just rehabilitators. They were abilitators. I KNOW THE CHALLENGES THAT COME WITH HAVING A DISABILITY…
BECAUSE I’VE OVERCOME MANY OF THEM MYSELF.