With the outbreak of the Coronavirus disease, the retail industry is among the worst-hit sectors amid lockdowns and social distancing regulations. Supply chain disruption and logistics are just some of the challenges retail businesses are facing right now.
Additionally, non-essential retail establishments were ordered shut down until further notice to monitor and reduce virus transmission. And as businesses saturate the digital platforms to continue operation, competition becomes steeper. All these made business inventory management more crucial than ever.
But even before the Coronavirus pandemic, having proper inventory management is crucial across different industries, particularly the retail business. Shoppers experiencing an “out-of-stock” situation not only are disappointed but are most likely not to do repeat business with your company.
One of the reasons some businesses fail has something to do with inventory management. It does not matter if your products sell like hotcakes when you cannot deliver it to your customers on time. Most especially if it happens repeatedly.
Inventory management can be difficult, particularly if your small retail business is growing. Apart from securing a storage unit or facility for your warehouse, having systematic inventory monitoring is crucial. Let us know more about what this inventory management is and how it can impact your retail business.
What Is Inventory Management
Inventory management is simply the process of tracking the number of products you have in your warehouse and/or physical store. It could also be for keeping track of materials or equipment for your business. It allows you to know if you are running low on stocks or if you are oversupplying a low selling item.
Having an excellent inventory management system lets you avoid unnecessary overhead costs and lost revenue. With advances in technology, inventory tracking is easier than ever with a multitude of software available to help you with such concern.
To better understand how crucial inventory management is for your retail business especially during this COVID-infested economic landscape, here’s a breakdown of the importance of proper inventory management to your business.
Value of Inventory Management
One of the challenges retail businesses encounter is overstocking. Having excess inventory could take up valuable space in your warehouse. It would also mean you have to allocate money for labor to transport and track products you no longer need for your store.
Using your inventory system and sales history, you can create a forecast of future product demands. That way, you ensure you have enough items in your warehouse to ensure satisfaction from your customers and avoid overstocking on less desirable products.
Prevent Stock Shortages
In relation to the overstocking of low-selling or undesirable items in your warehouse, a good inventory management system lets you avoid stock shortages. If your retail business runs out of stocks of a particular product, you will not be able to fulfill customer orders. It will lead to lost revenue.
Streamline Business Operation
By embracing software that helps you with your business inventory, you can easily keep track of every product that is bought, sold, returned, and exchanged. You can check your stocks in real-time and no longer have to worry about missing items on your warehouse shelf.
It is extremely useful as well when you are managing multiple sales channels. It can be difficult as well to keep track of stocks across them. There’s a risk that you might be overselling your products and you do not want to disappoint your customers looking forward to purchasing an item.
Improves Order Accuracy
Having products returned is costly for your business. With efficient inventory management, you can avoid inaccuracy of order fulfillment. It lessens the chances of sending the wrong product to a customer or submitting a wrong order to a supplier.
More Satisfied Customers
Late deliveries due to stock-outs only send out a message that your business cannot be trusted. It pisses off customers having to expect the availability of their order only to be informed later that it is not, and that it would take some time for supplies to be replenished.
With your customers receiving the correct order on time, they are most likely to do repeat business with you. Customers will see you as a business they can depend on. Chances are, they would even recommend your products to friends and family members who are also looking for the same item.
In today’s business landscape, with big brands such as Amazon, Walmart, and Best Buy setting standards for small retail companies, inventory management has become more crucial for survival. Your business should embrace excellent inventory management solutions to stay on top of the competition.