Have you ever gone to a nice restaurant on a Friday, wanting to enjoy a steak after a long week’s work? You place your order only to be told that they’re all out?
That is terrible inventory management on the restaurant’s behalf.
Now imagine how your customers would feel in that situation. They place an order in your store, only to receive an email from you saying ‘oh sorry, we’re all out for the next few weeks’.
With these few simple inventory management tips, you can be sure that you always have steaks in stock.
Turn it around
Know how long it will take you to fill an empty shelf. If you cannot fill an empty shelf before the stock runs out, be prepared to remove that online listing.
A customer buying a product that you simply don’t have is the first step to a negative customer experience.
What is the longest turnaround time of all the materials you use? Take that time and then add the time it takes you to make the product that material is used in. Now do this for all your products.
This is your lead time. Knowing each product’s lead time is the first step to good inventory management
Use a multi-functional platform
To make sure you’re alerted when stock levels are low, you need to be using a reliable eCommerce platform.
With Shoplo, stock level alerts are automated. Select the availability of your product and you’re automatically notified when you’re down to 20, 10 or 5 pieces.
Automating inventory checks is simple. It speeds up a mundane j0b, leaving you with more time to focus on what you love.
Use an SKU system
Let’s say your most popular item is an ‘Indian long sleeve blouse’. That’s the name of the product listed in your store.
When someone orders a small size in black, you now have to refer to it as ‘Indian long sleeve blouse black small’. It can easily get confusing for yourself and anyone else dealing with your stock.
Use a simple SKU system. Everyone involved can refer to your ‘‘Indian long sleeve blouse black small’ as a ‘BLMx1B’. Now everyone knows what you’re talking about.
A reliable SKU system is also very important in your product feed and automating other sales channels.
Return your returns
Amongst the confusing and frustration of dealing with returns, stock numbers can and will be forgotten.
It is of the utmost importance that your stock levels are accurate. Your stock levels should always reflect a number of products on hand.
You will make mistakes and people will change their minds. This means you will have to deal with returns. As soon as a product is returned to you, decide what happens to it. Can it be put back into stock, or does it need to be repaired before it can be sold again?
A simple ‘quarantine’ section can play a big part in marking sure your levels are always accurate and reflect the correct amount of stock you have.
FIFO stands for ‘First in, first out’. Remember your first job of stacking milk in the fridge at the corner store? You would always make sure that the oldest milk would be the next to be sold. The same principle applies to your own stock now.
This method ensures that you are reducing your oldest stock. In turn, you are minimising your chances of having to deal with dead stock.
Avoid dead stock
Dead stock is the stock that hasn’t been sold in a certain time frame – a timeframe defined by you. It’s sat there for ages and under your current marketing, it’s just not moving.
Dead stock can be a result of fashions and trends changing. Perhaps you over-committed to making a certain product or you’re still figuring out how to efficiently manage your inventory.
It’s time to cut your losses and try and move it.
Consider some exciting ways to discount it or bundle it with another complementary product. If don’t care about the financial side, locate an influencer that can get you some notoriety and send it to them. You’re now dealing with influencer marketing!
Nurture your network
You obviously build, maintain and celebrate the relationships you have with your customers. But do you do it with the people for whom you are a customer?
These are your suppliers, the ones that provide you with your raw materials. It’s good practice to also grow and maintain positive relationships with these people. Whether you buy in bulk every few weeks or small amounts every few months, be sure they know what you’re doing with the product you buy from them.
There will be times where you need to ask a favour of your suppliers and get something urgently. A rapport with your suppliers can sustain such requests. They’re part of what makes your brand, too!
As just mentioned, there will come times when you sell something that you don’t have. How will you tell your customer?
There will come times when a package is destroyed in transit. Will you wait for a return or send a replacement immediately?
Having well-established contingency plans will ensure that you don’t compound the damage by making panicked decisions.
Such policies should be reflected in your terms and conditions if possible. If you’re willing to replace lost or damaged goods, make sure your inventory reflects this. Have an extra unit in stock. A well-planned and lenient returns policy can help you turn a disaster sale into a return buyer.
Good inventory management helps you preserve cash flow. Having too much stock means you’re sitting on money. Not having enough isn’t good for customer service. But having the right amount of stock means you get paid quicker and your customer gets their purchase quicker.
It is unnecessary to develop rock-solid processes for a small venture. But having some simple methods can really help you stay on top of things.
The more often you get things just right, the smoother your business will flow.
And the happier your customer will be!