The reason why most retail fail is poor inventory management. If your businesses rise beyond this enigma, then success will be your portion. As you are aware, stock ties up capital. Also, having a huge stock that does not match with your sales, lead to losses due to operating costs. Similarly, stock-outs lead to loss of customers which are an additional cost of lost sales.
With this in mind, you are confident that inventory management should always be your business priority. But how do you achieve this objective? Here are the three weapons for a successful stock management:
- a) Having multiple vendors
Having the right inventory level means the ability to access particular products regardless of the prevailing condition. In layman language, your stock levels rest on the demand of the product and the ability of the supplier to supply a quality that meets it.
As a business person, it is always advisable to have multiple vendors at a given moment. This is because the demand for a particular product may exceed the current supplier’s production level. Such an event can be a frustration to you and may result in loss of sales. Hence, it is important to have multiple vendors to achieve successful inventory management.
- b) Developing and executing inventory management plans
Inventory administration does not only involve knowing your stock levels. It is a continuous process that incorporates all other departments in the organization. As you are aware, the stock is the heart that supplies blood to the organization.
Hence, inventory plans should involve other departments such as marketing, Customer service, and production. As well, you need to assess previous season or year performances to develop plans to enhance your sales and avoid any mistakes you made. As such, to achieve quality inventory management, you should draw up and execute credible plans.
- c) Enhancing communication
The last vital weapon in achieving inventory management success in your business is communication. Establishing a good relationship with your suppliers and customers is crucial for the achievement of your business objectives. As an entrepreneur, you need to communicate with your clients and vendors about your next activities in your business.
For instance, if you are planning to run a promotional campaign that will increase the demand for a given product, you need to inform that supplier on time to prepare them for additional supplies. This way, you will have a smooth flow of sales and purchases and enhance your inventory management.
— online business step (@business_steps) 19 de junio de 2017