Inventory is the heartbeat of your business, but few business owners are actively involved in inventory management. This can lead to stockouts or products passing their expiration dates. In short, when you’re selling products, inventory management is a crucial part of entrepreneurship. Let us explain how to get started with inventory management.
What is inventory management?
Inventory management is the process of managing the incoming and outgoing goods of the company. It includes all the processes related to the flow of goods within the company. It is essential to continuously track which goods are being delivered, which products are being sold, and what the current inventory levels are.
Bring structure to your inventory management
Inventory management is very important, but to keep track of inventory, you need a well-defined structure. Think about the layout of your warehouse and how you will identify products. This includes product codes and barcodes. When we talk about structure, we must also talk about an inventory management system. To easily track incoming and outgoing goods, you need user-friendly software. Webship Online provides such software! With Webship Online, you can efficiently manage your orders and inventory.
Determine minimum stock levels
The minimum stock level is a threshold that alerts you when the stock of a particular product reaches its minimum level. This means that a new order must be placed immediately to prevent a stockout. When selling products, it is important to set a minimum stock level for each product. How do you determine this threshold? Each product and supplier has a specific delivery time. When the minimum stock is reached, you must ensure that new products arrive when the stock level is low. In other words, when the minimum stock is reached, there must be enough stock remaining to cover the delivery time. Startups may find this hard to estimate, as no data is available, but once data is available, it must be analyzed. This way, you can determine the minimum stock accurately.
Tip: Is a promotional period coming up? Check your inventory!
Choose an inventory management method
You will also need to choose an inventory management method. This method can be determined for each product, but it must be clearly defined. Ensure that the method is clearly understood by every employee in your company. The most commonly used methods are JIT, FIFO, and LIFO.
- Just in Time (JIT): This method allows optimal alignment between logistical flows and the production process. It helps keep inventory as low as possible because the goods are delivered just in time to be shipped directly to the customer. This principle helps save on inventory and labor costs.
- First in, first out (FIFO): In the FIFO system, the products that arrived first are the first to be sold. This is especially important for perishable goods.
- Last in, first out (LIFO): A method opposite to FIFO. In this case, the most recently purchased products are the first to be sold or used. Make sure the old stock remains sellable! Regularly move the oldest products.
Webship Online
Managing inventory involves many aspects. If you don’t want unpleasant surprises in the future, you need to carefully think about many factors before placing goods into stock.
Looking for an inventory management system? Webship Online is an affordable and user-friendly cloud application for managing your warehouse or storage space! Ideal for online stores, B2B warehouses, etc. Discover our different licenses or schedule a live demo. If you want to outsource your inventory management and logistics, Webship is also here to help. We handle logistics for many online stores.
