Inventory costs are undoubtedly one of the largest you will have to face. Effective inventory planning will help you analyze, control and reduce them. Effective inventory management will not simply help you be a more organized seller. It will also bring a positive effect on your business, by increasing profits (through reduced costs). Here are 5 tricks which you can use to achieve profitability through effective inventory management.
1) Have Adequate Stock For Popular Products
Getting more orders than the inventory in stock would lead you to pay more for getting extra stock at a faster time. A lot of time will also be wasted in this process. Hence, you must be ready with adequate stock for popular products.
It is crucial for you to identify products which are most likely to sell frequently. For eg: sunglasses, casual round neck t-shirts, water bottles, light sarees are some products which will attract people in summers instead of sweaters, full-length t-shirts, scarves, gloves etc.
2) Identify A Minimum Level
One of the best practices to maintain inventory is to identify a minimum inventory level. At all times stocks must be renewed whenever they fall below this amount. You must measure how quickly your products sell, and the time it takes to receive products from the supplier. This will allow you to calculate how quickly you can order the stocks to ensure the minimum level is maintained.
3) Differentiate And Prioritise Your Inventory
A smart way to organize your inventory would be differentiating it on the basis of its priority. Some products in your catalog will sell more frequently than others. There will also be stock which takes time to be delivered and needs to be ordered in advance. Understanding these differences will help you set levels of priority. You can accordingly order and arrange stocks as per their various requirements.
4) Be Aware Of Expiry Dates
At any cost, you cannot sell expired or damaged goods, as it will permanently damage your seller status. Hence, you must know when stocks in your inventory are about to cross the expiry date.
This will also allow you to prioritize your selling efforts based on the product’s expiry date. In case your products are or might remain unsold, they must be replaced on time.
5) Maintain Strong Relations With Suppliers
Your suppliers are the key to the smooth functioning of your store. Getting damaged or low-quality stock, late deliveries or inventory at a higher rate than regular market rates are harmful to you. Hence, you must have a positive and healthy relationship with suppliers. It can help you get high-quality products at the right time. You can also bargain with them to reduce prices on the basis of a strong relationship.
6) Check Notifications For Low Stock Products
Whenever your inventory levels are low, ShopClues will send you a notification through an email. Constantly check your mail for this message. It will ensure that you are able to have enough inventory to fulfill all orders!
Following these practices will enable efficient inventory management as well as reduction of inventory waste. This will lead to lesser costs and hence, more profits!