Keeping your business up to snuff takes a lot of effort, but when you keep at it for a while, some of the more tedious and strenuous requirements become easier. Like inventory: there’s a lot of stress, hours, organization, and physical labor involved in ensuring your stock in check, but it’s obviously worth it for your business to succeed.
With the right amount of planning (and the right amount of effort), managing your inventory can be a snap. It takes a bit of trial and error, and a willingness to learn from practice, but a commitment to your business’s success guarantees you can perfect it.
Know Your Product
Every business is, of course, different, and there are different ways to approach managing your inventory. It all starts with knowing what your products are made of, and what you need to make them the best that they can be.
Say you run an ice cream shop. I won’t pretend I’m an expert on ice cream, but I can at the very least assume ice cream is made with milk and sugar. So that means you regularly have to invest in milk and sugar.
But some people like sprinkles! And others may choose between a sugar cone, a waffle cone, or a cup to eat their ice cream from. Yet most likely, when any customer comes into your shop, they’ll choose one of those sundries to be paired with their ice cream.
This means certain items in your inventory have different levels of demand. Most ice cream shops nowadays have alternative diet-friendly products that don’t necessarily use dairy milk or real sugar, but an ice cream shop is an ice cream shop, and most of the ice cream sold will be made with real milk and real sugar.
That’s why it’s important to know the difference in demand between something like ice cream, and any of the optional add-ins that won’t always be ordered by a customer.
Know Your Trends
Going hand-in-hand with demand are trends. Trends reflect general demand over a period of time, and for a business, may be reflective of local factors (weather, local events, even competitors in the area).
So throughout winter for an ice cream shop, general demand for ice cream will fall, and you’ll probably have to invest in less. That doesn’t mean demand will fall completely—some people (like me) still eat ice cream in winter—so understanding the trends your store goes through will properly help you predict what you need to buy more of.
Trends are great because they’re so easy to learn. After a while, you may notice sales on rainy days are never fantastic, and on hot, sunny days, sales go through the roof. While I strongly advise you get literal with numbers and actually track those hits and misses, after a while, you’ll be able to predict how well your business does based on your own intuition.
Know When to Restock
There are certain inventory items that have a short shelf life, like dairy or meat. Others, like sugar and salt, can last a really, really long time, to the point where you can order it just once and then forget about it. Although you don’t want to forget—the supply of long-lasting items needs to be monitored, too!
It’s incredibly crucial to reorder inventory before you’re just about to run out, but you already know this. When you compare the demand for your products to how sales do over a period of time, you’ll be able to properly tell when you should reorder any inventory.
You can set the standard for reordering by deciding to restock when certain items in your inventory hit a certain number. You can also adjust this for flexibility, like when a product is selling really well and you want to prepare yourself for that continued demand.
And of course, you need to know every item in your inventory like the back of your hand. Know whether certain items are sitting on a shelf collecting dust, or the exact expiration dates of whatever you keep in a fridge. Maneuvering restocking can be a simple process, but you also want to take measures to prevent surprises.
Solidify Your Strategy and Get to Work
When all is said and done, knowing how to properly manage your inventory can take a bit of work, and certainly a lot of trial and error. But if businesses for decades have been overseeing their stock without computers or fancy systems that ensure good strategy, then you can very easily do it too.