As an entrepreneur, it takes a complex supply chain to get you the raw materials you need to make your products. Once they enter your facility, they come under the realm of inventory management. Whether your business is large or small, the basics of inventory management remain the same. A well-managed inventory is key to smoothly running your business. It is not just important to have a well-managed system that tracks stock, but an efficient strategy that is built upon two key factors; customer service and the optimum level of inventory. Satisfying the customer and making sure they always get what they want is of prime importance. It is also vital to ensure the level of inventory is not too high or too low. If it is too high, you will have dead stock and lose money, if it is too low, the customer will not get what they want and you will suffer loss.
So, take charge of your stock with an airtight approach to inventory management and try to:Understand the demand patterns:
For items that are regularly used, studying the trends of the past few months helps to establish the baseline demand for your stock. It is important to understand how your stock moves to gain insight into the way demands can change or be influenced by certain factors. For instance, seasonal influences may have an effect on the demand and you, in turn, would have to work out how that demand will change or vary over time and adjust the stock accordingly. Identify top sellers:
Categorise your products so that you have a better understanding of which items are selling quicker than others. As all the items in the inventory are not equally important, the ABC classification system helps to highlight which products to prioritize. Once you know which products are the top sellers, you can chart the demands and manage the reorders more efficiently.Establish your stock level requirement:
The stock level is of critical importance as it should not be too high or too low. In order to achieve this, you must also keep in mind the production and transit time for your products. For instance, if the production and transit time is one week, you need to ensure you have at least two weeks of stock to cover any sudden increase in demand. If the production and transit time is longer than one week, ensure you have enough stock to meet at least two times the consumer demand until the next shipment arrives.
Once you’ve implemented these basics, you should have a smooth and reliable inventory management system that delights customer and sends your cash registers ringing. Then, once you register with Amazon
as a seller and get access to our massive global customer base, you can keep expanding your inventory management and take your business to the next level.