Inventory management is a vital part of any business: it is essential to make sure that a company’s inventory is monitored and managed properly. A well-managed inventory can help a company reduce their risk of running out of stock and missing sales opportunities or overstock and bloated storage costs. You will also be able to see any trends in sales so you can make changes accordingly and have accurate records for your accounting purposes. That said, it can be hard to keep track of everything that comes in and goes out of your business.
You may choose to manage your inventory using spreadsheets. This method is not as effective and efficient because it requires manual intervention from you or your employees. It is time consuming and prone to human error but it can still be done. Administering a software inventory management system can be a lot less tedious than manually managing your inventory. This digital tool can help you track, manage, and keep tabs on any and all items that are in your inventory with minimal effort. If you are not using a software inventory management system, maybe it is a good time to start considering this option. Today, many companies use digital tools to manage their inventory. For furniture wholesalers, the benefits of a digital inventory system include increased accuracy, speedier deliveries, lower costs, and better business planning. Plus, being able to view trends in customer spending and product preferences can be invaluable for an industry where “products are made from non-proprietary materials, not protected by patents, where the brand recognition is low, and consumer tastes are fickle.”
In the furniture industry, the inventory to sales ratio is 1.6, meaning that for every $1 in sales, there’s $1.6 in inventory. Credit card data indicates that demand for furniture is cooling down and some of the companies may find themselves dealing with overstock in the foreseeable future. A good inventory management system would allow businesses to respond and recover quickly from such a disruption. Despite this, it is seriously overlooked as an operational investment: less than 50% of small and midsize businesses use an inventory system. The main barriers that prevent them from optimizing their inventory control are the expected ones: lack of knowledge and skills, lack of time, and/or lack of money. If your company is looking to adopt such a system, fret not! There is a variety of inventory management software packages and systems available. This software is available as an on-premises or hosted solution in the cloud. As a cloud-native company, we at step-up.today are partial to the cloud-based inventory management because this gives our clients a real-time view of their inventory (aka “when the screen says it’s in stock, it’s in stock!”) in multiple warehouses. Some, like ours are specialized to furniture businesses. The more advanced cloud inventory software is designed to track these items and then analyze them. It also offers integration with a variety of business applications like CRMs or point-of-sale systems. The software provides a user interface that can be accessed by the entire business or just the departments they want to manage.
Here are the three main benefits of digitizing inventory management:
- Improved accuracy
The problem with most warehouses is that they have an inefficient, outdated inventory system. This can lead to missed revenue or overstock. For an industry with low margins like the furniture industry, lost sales or deep discounting are absolute nightmares. One of the main functions of a digital inventory system is that it aggregates and manages data about where your products are at any given moment, it can send you alerts when stock is low or even help your employees to find misplaced items. In short, you get a bird’s eye view of your warehouses and the flow of goods. Some applications allow you can keep track of your inventory anywhere and anytime from either an Android and iOS devices (ours does!) Keep in mind that reacting instantly to inventory levels will take some practice and will depend on the relationship you have with your vendors. So don’t be intimidated if you learn that there are businesses in the industry who opt to monitor their inventory “to the minute” , ready to hit cancel on POs when levels are rising beyond a certain threshold. The main goal of real-time inventory isn’t to keep you on high alert but to give you visibility into your operations so you can better anticipate your inventory needs. In fact, a key benefit of an inventory management system is that it can improve relationships with your vendors and customers because everyone gets more of what they need at the right time.
- Inventory analytics
Cloud inventory software can provide insight into sales, customer service. Data analytics can help describe what is happening with your business, diagnose problems and do forecasts. Adopting data analytics is a must-have for companies who want to improve their processes, reduce inventory risks, manage obsolescence, classify inventory more effectively, forecast the demand, and react accordingly.
- Save time and costs
Inventory solutions help speed up your fulfillment. The software automates purchase orders (online and offline) saving time and money. Cash flow is vital for any business and with over X % of customers abandoning their purchases due to a poor customer experience, it’s important for businesses to have a solution that streamlines orders and eliminates human errors like overselling or shipping delays.
How should you select an inventory solution?
The first thing to think about is what kind of inventory you have in your warehouse. Our application is tailored to the typical furniture and home accessories wholesaling inventory: heavy items that need to be manually handled and can be tricky to transport and a wide range of unique SKUs. If you have a mix of different items, then it’s important to find out if that system can accommodate all types of inventory. Likewise, there are tools tailored to a specific type of inventory (e.g. dropshipping in case you don’t keep your product in stock). Next up, you have to consider the features that are best suited for the size of your company. Would a basic inventory solution suffice or are you looking for something a little more sophisticated? Keep in mind that this solution is a medium-to-long term investment so think six months to a year. Consider things like ease of use. Is the UI and UX matching the tech level of your team? Your inventory solution should not be a problem for someone with a minimal level of tech expertise. If you have a mobile sales team, your inventory software will ideally be mobile friendly. Even if the full software capabilities aren’t available on mobile, your sales reps should be able to access inventory on the go and place orders from their phones or tablets. Another thing to factor in is the foreseeable business growth. Ask your software provider about scaling if you can add new locations, sales channels, or product lines. Finally, if you opt for an advanced solution, you need to pay attention to the integrations with other software you may have like accounting software or CRM. Switching to a digital solution that does not integrate with the systems you are already using means more work for your employees who need to plug in the data from one system to another.
The most important features in an inventory management system are those that make it easy to track and manage inventory. If you can afford a more complex solution, here is a checklist of features that can make an inventory management system useful:
1) a built-in product stock levels monitor that can automatically alert you to any potential product shortages, problems or dangers;
2) the ability to integrate with other systems like Point of Sale (POS);
3) the ability to generate reports on your inventory;
4) the ability to provide you with real-time visibility into your inventory;
5) the ability to generate forecasts for your next seasons;
6) variable pricing for particular items, such as seasonal products that sell for a lower price during certain times of the year;
7) the ability to take photos of your products and add them to your inventory management system for easy identification;
8) analysis of pricing trends and forecasting;
9) automated or manual printing of purchase orders, invoices, labels, packing slips and other documents that are automatically generated by the system;
10) when items can be divided into different categories so you can use a single inventory management system for all types of products, without having to create a separate database for each product type;
11) allowing customers to track their orders and shipments in real-time;
12) entering product information, pricing, discounts and inventory levels into the system;
The advantages of using this inventory management software are that it will help you to get organized to stay on top of paperwork and tax rates. But at the end of the day, choosing the best software for you is not a one-time task. Go easy on yourself and your team. Here’s a joke to get you started:
Knock, knock!
Who’s there?
Missy. Missy who?
Missing inventory.
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