Around 43% of small businesses don’t track their inventory or if they do, it’s manually.
Prioritizing your inventory management will save you time, money, and ensure you’re delivering great products to your customers. Perhaps your inventory skills are lacking so you’re looking for inspiration.
Sound familiar? Don’t worry, we’ve got you covered. Here are the seven main inventory management mistakes to avoid.
1. Not Using Automation
One of the biggest mistakes is not using automated inventory management. As a business owner, you must track your stock, monitor incoming items, and link with your suppliers so data must be accurate.
Many business owners still use spreadsheets or paper, which increases the risk of error. Plus, if you don’t update Microsoft Excel then it can affect the data and you may have to re-create it.
Another issue is if you use multiple programs for your stock. For instance, you may use a program for accounting, one for suppliers, and another for tools. If these aren’t integrated, then it’s easy to lose valuable data or miscalculate your stock recording.
Instead, find the best barcode scanner app for inventory for business so you can track inventory as you go.
2. Minimal Training
Aside from choosing the right inventory management apps for your business, consider the training you’ve offered the team.
Note, there should be two people in charge of inventory rather than switching between employees. This is so your two employees can develop a system that’s repeated every time. Eventually, they will have a deep knowledge of inventory management so that it’s an efficient and effective process.
And if you’re hiring, choose the candidate who has experience with tracking inventory. It’s also crucial that they are trustworthy, so contact their past employers to double-check.
Once hired, give them up-to-date inventory management training so they get used to your company’s system.
3. Not Checking Inventory
Unsure how to manage inventory?
The key is to regularly check your stock to know which products aren’t selling as well. Most companies procrastinate taking inventory and are forced to do it after hours, costing in fortune in employee payroll.
Instead, businesses should take frequent mini inventory, either every week or month. You can do it in groups so if you’re selling stationary, then focus on notebooks on one day and pens on the next.
4. Poor Communication
Aside from monitoring inventory management costs, business owners must promote good communication. If you’ve hired an employee for inventory management, then regularly check in so you continue to meet customer demands.
To help you, use automated inventory management software so your team can access information via their smartphones.
5. Weak Vendor Relationships
Businesses often overlook their relationships with vendors, but it’s as important as with customers. You must build a strong working relationship so that your store stays stocked with great products.
Make sure you’re clear with deadlines and expectations. For instance, if you know an item sells well during the Holidays, then tell your vendor in advance so you’re both prepared.
6. Too Many Products
Although it’s tempting to fill your store with trending products, avoid getting too many. If you’re worried about this, use the inventory management software to check when you stocked the particular item and how many you have left.
The key is to find a balance so you’re not lumbered with hundreds of unwanted products. Plus, staying informed will stop you from over-ordering in the future and potentially make errors as you’re counting your stock.
On the flip side, having too few products can deter customers. Think about it, you find your dream pair of sneakers online, only to find that they’re sold out. Some customers may email the vendor and ask when they’re re-stocking, but most would move to the next store.
This shows how crucial monitoring your stock is, so you can refill popular items and keep your clients happy.
7. Having Multiple Storage Sites
If business is booming, you may have multiple sites for your stock. While this feels convenient, there’s a risk that you’ll end up with inaccurate counts and waste time traveling between locations.
You could also miss an entire section of products, problematic if it contains hundreds of dollars worth of items. And having multiple locations increases the risk of theft or items getting lost.
Businesses that need several storage units should keep similar products together so it’s easier to track. Make sure that products are organized and you maximize the space so there’s little clutter.
And if you need a warehouse, make sure it’s a smaller space. Because if it’s larger, then you’ll fill the area with more products, making you less vigilant about your stock. Plus, a major bonus is it’ll make managing your inventory far easier.
You also will learn tricks of the trade so it’s more efficient. For instance, store your most popular items nearest the packing desks and use a mobile device to receive orders. Not only does this reduce time and clutter, but there’s less chance of human error.
And when there’s free time, ask your team to prepare empty boxes so they’re ready for the next deluge of orders.
Top Inventory Management Mistakes
Hopefully, after reading this article, you now know the top inventory management mistakes.
You must automate your software so that everything is accurate and accessible for employees. You must also streamline your products, nurture vendor relationships, and minimize your storage space so you stay atop inventory management. Good luck!
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