Too much stock can be a drain on finances, too little stock could upset your customer base and incorrect stock could result in lost profits and a waste of resources. If you want to stay on top of your A-game and master your stock management, start with these top tips…
1. Understand history to predict the future
If you don’t have a thorough understanding of previous sales data and patterns, ask yourself, why not? You should know your stock and your customers like the back of your hand. Understanding what product you have sold, when you sold it and where is essential for predicting future sales and ordering the correct quantity of stock to satisfy your customer base and avoid complications. Monitor trends, know your bestsellers, your slow movers and use this knowledge to create your sales forecast. It might not be a Lee Child novel, but your sales data should be a weekly read.
2. Avoid manual stock takes and spreadsheets
Historically, stocktakes were performed manually and inputted into a spreadsheet, but times have moved on, and so it’s time you moved with them. Utilizing software and warehouse inventory management systems can save you a lot of time and ensure your stock takes are accurate. Whether you sell 200 or 200,000 products, tracking and controlling your inventory is absolutely vital. With the right management system, you can avoid any mis-shipments, reduce errors in the packing process, locate inventory quickly and track your inventory levels in real time.
3. Hold only what you need
Your historic sales data should give you a good indication of the stock levels you need to hand, including any seasonal peaks. Holding too much stock can actually have a negative impact on business performance. It keeps your capital tied up and requires additional space to house it too. You may also find that insurance premiums skyrocket with large amounts of stock. All of this is unnecessary, with a good stock management system you won’t end up with tons more product than you ideally need!
4. Be wary of supply chain risks
It’s important you don’t put all your eggs in one basket when it comes to stock. It’s great to develop trustworthy relationships with suppliers, but you should also be wary of the risks to your supply chain if you rely on just one manufacturer to produce your product. It’s always good to have a back-up and it’s worth having a plan B in place if anything was to ever happen and you’re left with disgruntled customers and an empty inventory. It’s better to be safe than sorry!
5. Consider how you store your stock
How you store your stock is also important. In order to reduce mistakes and save time when staff need to search for the correct item, you need to ensure stock is labelled clearly and avoid putting similar products and packaging right next to each other!