Stock Management in Retail Business
The first and probably the most important hurdle you’ll encounter in any ecommerce business is stock management. A lot of new businesses collapse under the weight of their own products, i.e. they’re just starting out and they order way too many products. They don’t have anywhere to store them, they don’t sell as well as anticipated, etc. and the business goes bankrupt within months. This is why stock management in retail business is extremely important.
The old way to manage stocks, such as excel spreadsheets (or even pen and paper!) are quickly becoming obsolete. Compared to current solutions, it’s a system that’s prone to human error and also, incredibly ineffective time and money-wise.
With competition across all categories of goods as high as ever, you can’t afford dealing with any disadvantages that are easy to overcome. Otherwise, lots of competitors who manage their stock in a properly will run laps around you.
Well, even though there are many ways to optimize your business, the top priority in retail is stock management software. That’s because it provides the biggest improvement in business efficiency and also makes other important tasks much easier.
As of 2020, e-commerce is outperforming traditional retail at alarming rate. With software that can link your point-of-sale and accounts like Amazon or eBay together, there’s plenty of reason to expand online. And to be honest, there aren’t really any reasons why you would want to stay away from it.
What does a business without inventory management look like?
Honestly, it’s a mess. If an inventory management system keeps everything in order, your business will clearly be out of order without one. At the end of the day, this affects your business’ bottom-line, making it hard continue operating, let alone grow.
A lack of a good inventory management process means you don’t know where anything is so you can’t sell it. Mismanaged items can also be stolen much more easily. So, not only are you spending money on unknowingly replacing stolen goods, but you’re also spending on storage space you aren’t using, paying staff who may be stealing from you, and wasting money on things that aren’t selling.
Another thing that can often happen is when your best-selling product goes out of stock without you knowing it. If you have a popular product, for example, a pair of headphones, well, mismanaging that stock could mean that you ordered too few of them, couldn’t keep up with demand, and you never realized it until it was too late. Now, your stock is sold out and your customers will have to shop somewhere else.
It can be scary to think about having to implement an inventory management solution into your store’s operations. Furthermore, you’ll then need to add all of your items into that system, which might seem like a tremendous amount of work for a busy business owner. The good news is that it doesn’t have to be all headaches and spreadsheets.
Why would you need such a system?
If done correctly, inventory management will keep many other aspects of your business in line. It gives you the clarity to notice so many issues before they have the chance to spiral out of control. It will help you solve challenges like the following:
-Spending Too Much on Inventory and Storage Space
-Avoiding dead stock
-Managing your supply chain
Tips for retail businesses
Even if you aren’t a multinational business, good retail inventory management can help you save your business a ton of money. As such, while sometimes it can be tempting to buy merchandise in larger quantities to take advantage of vendor discounts and free shipping, having excess stock isn’t always good for the bottom line.
Because of this, excess stock can be problematic for a few reasons. To start with, you don’t want too large a portion of your business’s funds to be tied up in merchandise, and you could risk losing money if you’re not able to sell the products in time. (This is especially true for seasonal products. Ask any business owner who tries to sell Christmas ornaments after the 25th. Consumers naturally expect heavy discounts and you might sell at a loss if you sell the items at all.) Additionally there are costs associated with storing excess stock.
Quick Order Processing
Slow order processing can clutter inventory management. This is why it is very important to make sure that your orders are processed, dispatched and shipped as fast as possible. Nothing is more frustrating than ordering something and waiting for days only for it to be processed, then another few days for the actual delivery. While shipping can’t always be sped up, the order processing can be. So make sure you’re on top of it, otherwise you might end up with cancelled orders and unhappy customers.
Running a business already is hard enough and not having a good retail management and inventory management system to help out will do more to hurt you in the end. Not only do customers not like an unorganized store, but operations overall run smoothly when everything is in its place