TECHI SEGMENT

Track inventory data

Whether you store the stock yourself, use a fulfillment partner, or rely on drop shipping suppliers, keeping close tabs on inventory data is the key to effective inventory management. The inventory data you’ll want to track includes:

• Product numbers. A Stock Keeping Unit (SKU) is a unique number for each of your products that makes it easier to track inventory. They are vital for retailers and wholesalers to identify products and monitor stock levels.
• Quantities on hand (QOH). The current amount of stock per item available in your inventory.
• Product storage location. The areas where your items are stored or displayed.
• Supplier information. This includes contact information, order minimums, case quantities, and delivery times (also known as lead times).
• Product costs. Wholesale costs per supplier and quantity discounts.
• Retail pricing. Current and promotional sale prices for your products.

SMEs that stock less than 100 items can create a spreadsheet on software like Google Sheets, for simple inventory tracking needs.

However, integrated services such as Lightspeed or Clover are an excellent option for tracking inventory, supplier data, purchase orders, and stock receipts within one cost-effective system.

Use inventory forecasting

Forecasting is predicting how much inventory you’ll need to meet upcoming demand. Demand is based on a range of factors, including:

• Product sales velocity. How quickly are your products selling?
• Upcoming promotions. Do you have discounts or offers coming up that will entice more customers?
• Market trends. Are the products you sell becoming more popular due to market trends?
• The season. Are your products more popular in the winter months or during summer?
• Business growth. Is your customer base growing?

However, the goal of forecasting is to have just enough inventory available to cover the predicted sales without overstocking. This is ideal for SMEs with less storage space.

Understanding sales velocity – a measurement that indicates how quickly you’re selling your goods – and supplier lead times – the time it takes for your supplier to have goods ready for delivery – are both critical to effectiveness.

Working with reliable and timely suppliers allows you to stock fewer items and order more often, which helps with cash flow Meanwhile, slower shipping suppliers or those used for seasonal purchases will require you to make fewer, larger purchases, which ties up more cash in inventory.

Luckily, many inventory management systems have built-in forecasting tools.

Utilize inventory management plugins

If you use Woo Commerce for your online store, you will notice the built-in inventory management tools and features that help with basic inventory management.

However, as your SME grows and your online store expands, a specialized inventory management plugin may become essential for enhancing the platform’s stock management functionality.

Woo Commerce such as Smart Manager, Stock Sync, and ATUM Inventory Management add advanced functionalities like bulk management, detailed reporting, and real-time stock updates.

A Woo Commerce inventory management plugin can streamline your online store’s operations by automating time-consuming tasks, reducing errors, and saving time.

Be clever with storage space

If you aren’t using a dropshipping supplier, it’s essential to consider where you will physically store your inventory items.

SMEs often have limited storage space compared to larger eCommerce businesses. Here are some simple but effective storage space tips:

• Whether keeping your stock in a spare room of your house or a large warehouse, make sure all of it is easy to locate when needed. Losing or misplacing stock will waste time and money.
• Keep your stock at a location where you can quickly pack and post it after receiving an order. This will keep customers satisfied.
• If you have limited storage space, optimize your vertical space by installing shelves, racks, bins, or hooks.

Understanding your storage space lets you set your minimum and maximum stock levels. The highest stock level you can maintain often depends on storage space limitations and whether you have room for overstocking.