Being on top of managing your inventory, stock and orders is a crucial part of running any business. If you lose track of orders of your products, profits and business will begin to rapidly decline. Your reputation and your efficiency depend on your quality of inventory management. Here are 5 useful ideas that might save you a lot of money and heartache in the long run.
- Separate your products. It’s said that there are only really four different types of products, or that all products can be grouped into 4 categories. Those categories are item, assembly, family, and case pack. An item product is a simple product that is delivered to and from a warehouse that requires no packaging or assembly and, is therefore, ready to be sold directly to your customers. Assembly products are items that need to be assembled – for example, a bicycle assembled using numerous parts like a wheel, chain and frame. A family is simply a group of products or items that vary, like a pair of pants that comes in a variety of colors and sizes. Lastly, the case pack or bundle is usually an item grouped together as one multiple pack for efficiency purposes. Be sure you understand and become familiar with these different product types in order to break down your inventory control into manageable portions.
- Label and barcode everything. This point cannot be stressed enough. Make sure every single item in your warehouse is correctly labeled and marked with an SKU number and a barcode. Consulting a labeling and barcodes equipment company such as Adazon Label and Barcode Solutions is a good place to start. Having an efficient system in place will help you easily locate items and not lose track of orders. All items in your inventory should be labeled with the product name, SKU number, UPC or Universal barcode (when working with external companies), product description, color, size, price, weight and sometimes dimensions.
- Regular auditing. Make sure to regularly, on a monthly basis if possible, audit your inventory to sufficiently keep track of all of your stock. Even with all of the great technology available to us, we need to keep track of items and orders. This will help you to understand what is really selling and what is dead stock. Getting rid of dead stock is key to running an efficient warehouse operation. All you have to do is create a list of every product you have on your shelves – simple really.
- Collect the data. Tracking what you’re selling and who you’re selling to is a fantastic way to get a better understanding of your business and how to generate larger profits. If you have a good understanding of what products are selling the most, then you can focus your energy on those products rather than the ones that simply aren’t selling at all. Analyze which items are top sellers, which customers are purchasing them, which months are slow and which are fast, and finally if there are repeat customers.
- Create purchase order systems. Each purchase order represents revenue, so it’s important to keep a clear track of what’s going out and how much is coming in. A normal sales process will look something like this: create a purchase order form, check that you have the items in stock, pack the order and figure out costs to ship, consider type of payment (credit card or cash), and then convert the order form into an invoice.