Businesses often depend on inventory to operate or fill client orders. Inventory is a major company asset that helps businesses with tasks such as planning and staying within budget. Hence, businesses should see keeping accurate inventory records as a major management tool that brings multiple benefits.
The retail industry, especially, is always constantly evolving and developing. As a modern retailer, it is imperative to constantly adopt new strategies, workflows and processes to ensure your business is not lacking behind. This includes how you manage your inventory, to keep your business ahead from others in a competitive market.
Proper inventory management, or inventory control, is needed for anyone especially in the wholesale distribution business. In the simplest of terms, inventory control refers to having greater oversight over business’s stock. Some refer to this as “internal control” or even as an accounting system set to safeguard business assets.
What is inventory control?
Inventory control or inventory management refers to the process of tracking how many of each product does a business have on their warehouse shelf, in store or with other retailers and distributors.
Having information and understanding on what a business has, where is it in their warehouse and when stock is going in and out can help lower costs, speed up fulfilment and prevent fraud.
At the same time, tracking inventory helps businesses understand how many of each product a business own, when a business is running low on stock, and whether a business should purchase that item again to resell it.
As a business retailer, such information should be ready at a glance to make proper and informed decisions quickly.
Why is inventory control important?
When there is an increase in customers, a business should be set to see an influx in sales. Businesses should then expect to see a continued increase in sales as a business grow and improve marketing strategies.
However, keeping up with the increase in demand and potential increase in returns puts a business’s warehouse in strain. For example, businesses will risk losing a sale because of insufficient inventory to fill an order.
Inventory control is therefore important in maintaining the right balance of stock in a business’s warehouse. Below are reasons why inventory control is significant:
Increased sales bring challenges
Economies are striving all over the world due to the average increase in customer spending year on year. This results in an increase in sales and potential returns for businesses but could potentially cause problems such as strains on shipping processes.
While stock is coming and leaving a business warehouse faster and faster, businesses need to ensure that their stock levels are accurate so that all processes are remains streamlined and efficient as they can be.
Otherwise, businesses could end up tangled in endless stock takes, customer complaints and stressed out warehouse staff which dampens a business’s growth.
Multiple sales channels are tough to manage alone
Customers shop from many different platforms and stores all over the world. This wide diversity in shopping platforms give businesses the ability to be where the shoppers are. This includes online platforms such as eBay, Amazon, in-stores and business’s websites.
Keeping track of stock across all of these channels could become tough if businesses are using spreadsheets that does not accurately track inventory levels. Thus, businesses run the risk of over or underselling across channels.
Using an accurate inventory software allows business owners to shift their focus and energies onto growing their business as the software automatically and efficiently updates all sales channels in real time.
Satisfy demand and avoid overstocking
Tracking inventory accurately ensures businesses always know when they are running low on their best sellers, when is the best time to restock and how many items a business should purchase to be able to fulfill back orders.
This allows business to satisfy the ever-increasing flow of demand for best products without running the risk of tying up assets in overstocked inventory. Hence, this is a win-win situation for a business as demand is satisfied at the same time overstocking is prevented.
Stock checks are kept quick and easy
Tracking your inventory everytime a stock is bought, sold, exchanged or returned across multiple channels makes stock checks instantly easier and quicker at the end of the week, month or quarter.
Stock should always be checked regularly and accurate stock control lets businesses know instantly if a stock is missing or mispacked. Trusting inventory levels are correct in the majority results in faster and easier stock checks.
Businesses will only have to confirm data that is already available in the system instead of doing lots of time consuming data entry. This allows businesses to handle the exceptions and concentrate on growth activities instead.
Inventory control keeps a business checked on the right balance of stock in a warehouse. Businesses do not want to have excess inventory taking space in warehouses unnecessarily.
Too much inventory triggers losses, whether a product expires or gets damaged. Having control of inventory also gives a business a better understanding of which product is more popular or selling more.
Brighter business reputation
With accurate and efficient stock management, customers will be happier and more satisfied, resulting in better chances of positive reviews leading to even more sales. More sales results in higher possible returns, keeping a business growing sustainably.
Keeping customers updated if and when new stock is available encourages them to trust businesses, which in competitive times, a valuable asset to any business.
To conclude, accurate inventory control is vital and imperative for any business’s survival. Without accurate tracking of inventory, business owners will never have a true account of how the business is doing.
Businesses dealing with stock have to better track their stock inventory accurately, to keep ahead of the competition. Stock control do not only keep a constant flow of satisfied customers, it also improves the working environment and flow of businesses which results in a more sustained growth continually.