6 Tips to Manage Inventory for Your Startup
Evaluating your business regularly can help you determine bottlenecks in your processes that make you spend more money than necessary and disrupt valuable relationships with your customers. One integral part of your business is inventory management, which allows you to keep track of all of the products you have so that they can be sold more efficiently.
By managing your inventory effectively, you can make sure that you have all of the products on hand that you’re selling and reduce the chances of spending too much money on products that people don’t frequently buy while improving fulfillment times. Here are tips to help you manage inventory for your startup.
Table of Contents
1. Forecast Accurately
Inventory management requires you to forecast by accurately estimating your projected sales. If you use Square or something similar, you can do this easily by looking at past product performance. You should also look at market trends, your business’ predicted growth, the economy, and your marketing efforts. For example, if you’re marketing for a single product during the holidays, you’ll need to have more of the product on hand.
One of the most significant benefits of forecasting is that it helps you determine your finances so that you can spend money where it needs to be spent and avoid overspending. For example, suppose you sell products with the Amazon FBA program. In that case, you can learn how to use FBA revenue calculator to determine what your costs and revenue will be to make better business decisions.
2. Use FIFO
Depending on what your eCommerce startup sells, you’ll need to make sure that you are selling products that don’t perish before they make it to the customer’s home. Even if your goods don’t perish, you should be using the FIFO (first-in, first-out) approach. By selling products in the same order as they were purchased, you can ensure a better quality of products and a better customer experience with your business. You can adopt FIFO easily by adding new items from the back so that the oldest products are in front for picking.
3. Identify Low-Turn Products and Stock
Whether you sell your products directly on your Shopify store or in multiple places, you’ll need to identify the stock that doesn’t sell well so that you can stop stocking that item and wasting money. You should also consider the different strategies that allow you to effectively liquidate unsold products, so that they don’t take up space in your warehouse any longer.
4. Perform Audits
Auditing your inventory doesn’t have to be complicated, but you’ll need to manually count what you have on hand, even with good inventory management software. There is no right technique for your business, but you should ensure that your stock matches what you think you have so that you can identify potential issues in the warehouse.
5. Always Do Quality Control
No matter what you sell, you should never forget quality control. Your products should all look great and work well. Quality control doesn’t mean that you have to have one person check everything on their own. Instead, assemble a quality control team that does an examination of every product before it gets shipped.
6. Track Your Sales
While you should add up sales at the end of the day, you should also understand which items sold so that you can update inventory totals. Not tracking your sales and updating your inventory can make your eCommerce store accidentally sell a product to a customer that isn’t actually in stock. While this may seem like a minor problem to you, it’s enough to make the customer stop shopping with your company entirely. Understanding your sales can help you understand your inventory better and keep your customers happy. Use these tips to keep your inventory organized and optimize your startup’s profits.
