Managing your inventory can be quite tricky. It’s not a problem unique to online sellers — it’s generally one of the most difficult processes in the retail industry.
Businesses with physical products need to keep track of their inventory to ensure there’s enough stocks for customers to expect. It can also cut the cost of acquiring and storing inventory, and aid in growing profitability. It’s also important to manage your inventory because it can tell you whether your business has gained profit or incur losses. Stock mismanagement also contributes to service-level agreement (SLA) violations, which can also increase unwanted charges for your business. The goal is to balance your stocks, minimizing costs, and tracking your inventory efficiently. There’s a science to managing your inventory—and a method to the madness. But first, let’s get started on the basics.
What exactly does managing your inventory mean?
Also known as inventory control or stock control, inventory management is the process of maintaining the right amount of stocks to ensure a business meets the demands on time, without raising the costs of storing stocks.
Why is this process important? For one, proper inventory management requires efficiency, which in turn, drives customer satisfaction.
For example, if your business claims to have certain items in stock and are being processed for shipping but cannot be located, it can become an incomplete shipment.
That contributes to a negative customer experience. Multiply that situation by the hundreds, and you get hundreds of unsatisfied customers.
From a business’ point of view, mismanaged inventory can increase costs, particularly because more stocks are being bought than being sold. A surplus of stocks can result in a buildup of obsolete stocks—products that are no longer in demand.
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Why taking control of your inventory can make or break your business
Monitoring your inventory ensures you have the appropriate amount of stocks according to your customers’ demand. It also protects the production process should you encounter problems with the supply chain, and guarantee your capital isn’t needlessly tied up. That said, what are some problems that business owners encounter when it comes to stock control?
Common challenges sellers face in managing their stocks
Since inventory management is one of the hardest parts of running a business, you might encounter some problems related to stock control. These can include the following:
Absence of real-time reports
Businesses following a manual process of counting inventory can’t create real-time reports or historical trends. Without proper reporting on stocks or trends, it can be harder for sellers to make decisions on stocks to purchase.
Inefficient warehouse management
Whether you operate with a single warehouse or multiple, you’ll need to keep track of inventory data—including real-time numbers.
Without a centralized inventory management system, there could be shipment errors, order fulfillment delays, lost orders, incorrect stock counts, mislabeled barcodes, among other problems.
It gets even worse if your business operates with multiple warehouses. It becomes harder to stay on top of your stocks without proper software designed to support proper inventory management. For instance, if you’re selling a particular product and later find out that your supply can’t meet the demands, you’ll be forced to turn good-paying customers away by telling them their orders are out of stock. This also brings us to…
Lack of centralization
When a business grows, so does their inventory. This means their stocks can also expand to different locations. But manually keeping track of inventory makes it tougher to communicate data across different warehouses.
Manual reporting can’t show real-time data of inventory across locations, which can cause delayed or wrong shipments. Especially if stocks run out fast, it can be impossible to get real-time reports from multiple warehouses.
Suppose you have stocks of a product that you sell across multiple marketplaces like Lazada, Woocommerce, or Shopee. Every time there’s an update in the number of your stocks, whether it decreases in sales or increases in supply, you’ll also need to update your stock numbers for each marketplace—all in real-time.
Without an accurate number of stocks for each marketplace, you’ll become more prone to inaccurate delays in shipment or unfulfilled orders.
Not only is managing your inventory across multiple warehouses tedious work, without the aid of inventory management software, any reports you create can end up showing inaccurate data.
No trend projections
Forecasting inventory trends are important to keep your business afloat. With a manual process in place, a company is unable to anticipate the changing nature of customer demands. Without historical data in place, businesses might fall prey to overstocking or understocking, either of which can increase costs.
Imagine there’s an upcoming sale period, and you’ve got bulks of a certain product. But you didn’t realize that previously, demand for this particular item had dipped. So you’re left overstocked with items nobody’s looking for anymore.
It helps to have historical data to rely on so you can make more informed decisions on your stocks.
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How Omnirio can help you manage your inventory
Omnirio automatically aggregates your inventory across different warehouse locations. With Omnirio’s smart management, all stores are well-stocked and ready for the big sales.
Omnirio’s technology allows you to manage your inventory and distribute to all your marketplaces in a snap and increase data accuracy across multiple warehouses.
In a nutshell
Inventory management is one of the most crucial parts of business. Keeping track of your stocks and making sure you don’t incur losses is harder without the right platform to guide you. Stay on top of your inventory using trusted inventory management software to keep your business afloat.
Try Omnirio today.