4 Inventory Management Tips to Jump-Start the New Year
You’ve survived the furor that was Black Friday, Cyber Monday and Christmas. Once you and your staff have leapt over that hurdle, there are January sales to contend with. Many things can go wrong for retailers during this period, most of which pertain to the tracking and management of inventory. The four tips below can help you sort through the holiday medley and jump-start your business in 2016.
1. Ensure you have accurate stock data. The most important factor to consider is how your sales data is stored. If your business operates across third-party marketplaces (e.g., Amazon.com, eBay, etc.), a website, and one or multiple physical stores, you’re going to want to have a system that integrates all that data into one place.
Every retailer has made the mistake at least once of miscalculating the amount of stock they’ll need over this period. It’s easy to underestimate the appetites of consumers and end up with an empty warehouse before the holiday season has even peaked. Conversely, it's just as easy to order too much stock and end up with a warehouse full of unwanted products that will likely expire and/or take up valuable space. This is quite an easy mistake to make, particularly when you sell via multiple channels. Integrating your inventory data from all channels can help you gauge how much stock you should order based on current and historical customer trends.
2. Factor in third-party logistics providers. If you use outsourced warehousing or third-party logistics (3PL) companies for inventory storage and shipping, you need to factor this into your inventory management system. Doing so can reduce the risk of encountering errors — whether they're caused on your end or the third party. In addition to avoiding errors, having a view of all your inventory can allow you to be better informed should a customer request the status of their delivery or reserved item. For example, it’s helpful to be able to see when goods are received at the warehouse so that you can allocate them against the correct purchase order and marry up the price with any seasonal discounts or bundles.
3. Keep consignment stock separate from owned inventory. If you accept products on consignment — i.e., you don’t pay for them until you sell them — from your distributors, it’s important to monitor this stock without mixing it with your owned inventory. You don’t own these products, so while you want them to be available to sell on all channels, they shouldn’t appear on your inventory value report. You can compartmentalize this stock by setting up a new inventory category or "virtual warehouse" to store and track consigned inventory on your system.
4. Use barcodes. With so much inventory coming and going via so many channels, it’s important to keep track of each and every product in a method that's not time-intensive. The solution is barcoding. With a relatively cheap USB barcode scanner, you can calibrate your inventory management software to work in tandem for quick and easy scanning and recording of inbound and outbound stock. Doing so can cut down on a majority of inventory errors that may arise.
In closing, inventory management software is the saving grace of retail. With so many channels, supplier deals, holiday discounts and categories, it's crucial that you and your staff can view and manage all operations within your business in one place. Read the inventory management guide for more hints and tips.
Ifan Kaldain is a SEO specialist for Brightpearl, a cloud-based business management application that incorporates inventory, accounting, CRM, POS and e-commerce.
