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When most people think about inventory management, they instantly get a headache from thinking of the overwhelming number of items to count and organize. However, developments in technology have allowed many businesses to access inventory management software that makes this process tremendously simpler. Instead of manually tracking everything, the software records the information and provides statistics and measurable data for you, and anyone in your network that you allow. Are you ready to save money with inventory management techniques? Here are some tips to follow.
Save Money with These Inventory Management Techniques
Avoid Spoilage
If your business handles items like cosmetic products, food, or other goods that are perishable, you know first-hand how they can go bad if they are not sold in time. The percentage of spoilage is higher if you have too many products or non-seasonal items sitting in your warehouse. To save money, an inventory management system can help you avoid too much spoilage.
Avoid Dead Stock
Stock that can no longer be sold is known as dead stock. This does not necessarily mean that these products have expired or gone bad. They could simply be out of season or have become irrelevant to your customers. You can reduce and avoid dead stock by carefully monitoring your inventory. This could mean using an inventory management software to understand what items your consumers are looking for and which items they have lost interest in. With his information, you can hold off on manufacturing goods that are not currently wanted and focus on stocking up on items that are in higher demand. To get rid of dead stock you can also implement any of these processes:
- Bundle the items with complementary, popular items and sell the entire combination at a discount.
- Return the items to your supplier for a store credit. Find out if the return policy allows returns and be prepared to pay a restocking fee.
- Donate the items. You may get a tax deduction for the market value of charity donations.
Cut Back on Storage Costs
Warehouse use fluctuates based on how many goods you need to store. In other words, warehousing is a variable cost. When you store too many products at one time, or end up with goods that are too challenging to sell, the costs of your storage will increase.
Forecast Demand
Forecast demand can help you get better control over your inventory and understand the amount of stock you need over the next few weeks, months, or years. Although it’s impossible to perfectly predict demand, metrics from inventory management software can be very useful. You can view trends in the market, event cycles, surges and drops in demand, previous sales from last year during the same month, and more. When forecasting, here are a few aspects to consider:
- Market trends
- The previous year’s sales during the same month or week
- This year’s growth rate
- Seasonality and the overall economy
- Guaranteed sales from subscriptions or contracts
- Upcoming promotions
- Planned advertising spend
First In, First Out Rule
An old but effective inventory management principle is that the first items that arrive at your warehouse should be the first to be sold. This rule has maintained its importance because older stock is more susceptible to wear and damage, and quality gets worse over time. But sometimes old stock is hard to avoid, especially as changes in design can force you to store products that have lost their appeal. Without proper inventory management and warehouse organization, older products may end up selling for lower prices than you would like, or they may not sell at all.
Dropshipping
If you have a small- to medium-sized business, dropshipping can be an affordable and money-saving way to manage your inventory. Dropshipping is when your manufacturer or wholesaler stores and ships your products for you. It avoids the expenses of managing a large warehouse or storage facility.
Automation
Businesses who still rely on paper and pen to record every transaction are living in the past. There’s no way to keep up with a growing e-commerce business if you rely solely on manual tracking. Nowadays, to stand a chance at having a successful business and staying competitive, business owners can track records of sales and shipments with a few simple clicks. You can easily save money on hiring multiple data entry clerks by investing in sales and inventory software that automatically records events.
Regular Auditing
Relying on software and reports from your warehouse is vital to understanding how much product you have in stock and how they are moving. There are several ways to perform regular auditing:
- Physical inventory: Counting all your inventory at once, usually at year-end.
- Spot checking: Choosing a product, counting it, and comparing that number to what it was expected to be (usually problematic or fast-moving products).
- Cycle counting: Each day, week, or month, a different product is counted and checked on a rotating schedule.
APS Fulfillment’s Inventory Real-Time Management Service
As you can see, inventory management is vital to a successful business. In fact, thriving business leaders would suggest that it should be your primary concern as your business grows. If you want to implement a robust inventory management software, our third-party logistics company can help you.
APS Fulfillment, Inc. cares about our clients’ success. Our professionals provide our clients solutions to meet their warehouse organization needs. We provide services such as real-time inventory management, e-commerce fulfillment, fulfilment solutions, and fulfillment markets. There are endless benefits to working with a third-party logistics company that uses the best quality software systems to manage your warehouse, so if you’re looking for the right company, look no further than APS Fulfillment, Inc. You can contact us by e-mail at [email protected] or by phone at (954) 582-7450.
