As a business owner, you may find yourself pained each time you’re forced to liquidate inventory at below cost in order to free up shelf space – or worse, simply throw items away because you weren’t able to market them within their usable lifespans, like food. Investing the time and money into a quality inventory management system is crucial to minimizing the inefficiency and waste that can result from inadequate organization, but if you’ve spent some time flying by the seat of your pants, you may wonder where to begin.
Read on to learn more about the goals you may want to seek from your inventory management system, as well as some Smart POS applications that can help you achieve these goals and improve your margins.
Did you know…
Technology makes a number of tasks easier, and inventory control is chief among them. Rather than relying on notebooks or other physical documentation to know what you have and where it’s stored, you’ll be able to track each product electronically with the click of a button.
Apps available on Smart POS systems, like the Clover Station or Clover Mini, can be a great way for you to get started with an inventory management protocol. By adding inventory tracking measures to your existing payment processing system, you’ll minimize the amount of up-front programming work you’ll need to do to get all your products logged, and will be able to instantly calculate complex figures like your cost of goods on hand. And the automatic reminders and other notifications provided by these apps can let you know when it’s time to reorder certain items or even rotate your stock.
Regardless of what you’re seeking from an inventory management system, the Clover suite of products should have some options that work for your business — and once you get into the swing of using an inventory management app, you’ll likely wonder how you ever stayed afloat without one.
What goals should you seek from an inventory management system?
Identifying your goals before overhauling your inventory organization is key to a successful transition that won’t leave you spinning your wheels. The priority of each goal — and even the range of potential goals — can vary widely among each business based on industry and local market forces, but some common goals include:
- Diminishing waste and shrinkage
Nothing can hurt your profit margins more quickly than throwing away stock or liquidating it at a lower price than you initially paid, which means that diminishing waste is likely to be a priority for any business. By reorganizing the way you order items or even the frequency with which you make inventory orders, you may be able to ensure you keep waste to a minimum.
Rotating your stock can be an important part of diminishing your waste — and with a regular stock rotation schedule, you’ll be able to better plan sales, endcaps, and other promotions that will help you offload stale product while still making money.
- Improving the customer experience
If you’re like most modern businesses, you have at least one listing on an online site that allows customers to select ratings and leave comments about their experiences — and because many of these third-party listing and rating sites don’t allow business owners to edit their own entries, maintaining a positive and helpful atmosphere for your customers can prevent you from spending hours trying to resolve complaints or cleaning up unfavorable comments from the long memory of the World Wide Web.
Even if you haven’t yet dealt with a bad review, keeping your customers happy is a worthy goal for any business.
- Minimizing financial inefficiencies
The carrying costs of your on hand inventory can eat up margins and may constrict your working capital enough to prevent you from hiring additional employees, expanding your business space, or adding new products to your selection. This means it’s crucial to avoid keeping large quantities of hard-to-move inentory on hand; but by that same token, you’ll need a system that ensures you’re keeping enough of the product you sell regularly.
There’s also a distinct cost to inefficiency when it comes to employee pay. Paying employees to perform tasks that could be avoided (or mostly automated) with an inventory control system is generally a poor use of a business’s operating costs and will increase your FICA tax liability, while ensuring your employees are working only on tasks that require their direct attention will allow you to generate efficient working schedules.
How can you achieve these goals?
Even after you’re convinced that an efficient inventory management system is crucial to your business’s bottom line, it can seem overwhelming to try to implement changes — especially if you’re dealing with inadequate processes (or none at all). Fortunately, there are a few concrete steps you can take to set yourself on the path to inventory success.
- Maintain good supplier relations
By making efforts to keep the lines of communication with your suppliers open, you’ll be in a better position to make quick inventory changes or even call in favors to push an order through. You’ll want to learn the names of each of your suppliers’ front-line employees and perhaps even jot down some notes while you’re making small talk so that you’ll be able to develop more of a rapport over time.
On the other hand, if your existing relationship with one or more suppliers is friction-filled, now is the time to work on repairing these relations — or perhaps even looking for a new supplier if you fear the relationship has deteriorated beyond repair. If you don’t have some minimal level of trust between you and your suppliers, you may have trouble fully committing to an inventory control system and ensuring that your shipments and deliveries remain timely.
And remember, help is in sight with the Smart POS app from Clover, called Inventory. It saves you valuable time, while managing your inventory for you!