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Top Tips to Improve Inventory Management

What does good inventory management involve? If you are a small-to-medium-sized ecommerce venture making use of warehouse services, then it would be fair to assume that you already know the rudiments. The reason why it is safe to assume this is that there are few things that can derail and ecommerce venture more effectively than poor inventory management. That means if your business has survived this long, then you must be doing something right. However, it’s also wise to remember that there’s always room for improvement – and there could be several things that you’re simply doing wrong.

The goal of good inventory management – and the thing that all the diverse inventory management methods, tips, and processes are aiming at – is to maintain healthy and profitable stock levels. Perhaps you can blame Amazon and the rest of them, but customers today simply expect their products to arrive on time (and quickly). SLC-based Olympic Eyewear, a distributor of wholesale designer sunglasses, also affirm that, if you are selling B2B, then inventory problems are perhaps even more unacceptable. Make no mistake about it, good inventory management is essential.

What is Inventory Management?

This article will be devoted to tips and tricks for optimizing inventory management, not a guide on how to do it. Nevertheless, it’s good to explain what inventory management is, why it is vital and, most importantly, what potential there is when it is truly optimized.

Inventory management is fundamentally about space and using the space that you have in the most efficient manner. Goods need to come from a manufacturer (B2B) or a wholesaler (B2C), go through your warehouse and be sent on to customers with the least delay possible. Delivery is something you handle independently, and the manufacturer or wholesaler’s job is out of your hands. Your responsibility then is to have the right stock when it is needed and to process it as efficiently as possible.

Good inventory management is also about smart budgeting and finance. You want to reduce your costs here as much as possible. One of the major tips for good inventory management is to know when growth is necessary and to update your inventory management system to just the capacity that you need. You then avoid spending money on what is destined to be empty warehouse space.

Tips for Optimizing Inventory Management

Use ABC Analysis

An ABC analysis is all about separating your stock into different categories, following the first three letters of the alphabet. “A” items are those that are a top priority for your business. You can think of these as the items that bring in the most profit, either because they are expensive items or because you sell a lot of them. The trick is to prioritize the “A” items and treat the “B” and “C” items with the attention that is due to their declining importance.

Cut Human Error

…or deliberate theft! Mistakes in processing will always be on account of human error. Therefore, assigning as much use as possible to warehouse management software is a solid way to reduce this. Technology is your friend here.

Implement Supply Chain Management

In practice, this means dealing with those who provide your materials or products. We said before that this is out of your hands, but it isn’t really when you consider that you can select between different companies and services. This is one area where you need to shop around  – and shop smart.

It is almost certain that there is something in your inventory management that could be improved. For small ecommerce ventures, streamlined inventory management is one of the few ways to really stand out.

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