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Any parent will tell you that doing a little bit of work as you go is a far better approach than letting things pile up. Putting away toys as a part of playtime, loading dirty dishes directly into the dishwasher, doing laundry a few times during the week instead of spending a whole Saturday doing load after load when essentials start to run low. Making best practices part of the routine is just plain better in the long run.
In this series, we’ve touched on a few strategies for making sure you’re making the most of your inventory. For this entry, we want to encourage you with some strategies for making that way of thinking a mainstay in your business and among your team.
So, here are three simple steps to make sure your inventory is optimized "by default" going forward:
1. Budget the time and resources needed for inventory control.
Inventory simply doesn't manage itself. Software tools like Shopventory can help cut way down on the amount of time needed, but unless Artificial Intelligence really gets scary, humans are still going to be in the mix for the foreseeable future.
There's a temptation to make inventory management an afterthought, but you do so at your own peril. An optimized inventory ends up saving you time. Rather than chasing after sales, customers, and vendors blindly, you now have the data to know which sales make the most money, what your customers are willing to pay for, and which vendors give you the best deal. Small investment up front, big rewards on the back-end.
2. Foster a culture of feedback.
The hierarchy of business is natural. It's necessary. But, in many cases, it's a barrier. At Shopventory, and countless other businesses, we've learned that doors need to be kept open to feedback. Your newest entry-level employee may have profitable insights into a product your CEO has never heard of. Your janitor may have a quick, efficient way to cut your maintenance costs by 40%.
Not every idea is a winner, and not all feedback is helpful, of course. That's why the hierarchy is in place to determine final outcomes, but any successful start-up will tell you that getting more perspectives from more people results in a better end product.
However, you almost never hear ideas from people who are afraid to be reprimanded, or from people with shy personalities, or from people who are simply never asked. Making your business a place where ideas are valued will expand your insights and give more context to your inventory analysis.
3. Audit often, and question the results.
Things change! That's how it goes in life generally, but in retail especially. Prices update, competitors emerge, fads emerge and fade away. This means an inventory that was perfectly optimized a year ago may not be quite so ideal anymore.
Setting regular milestones, whether quarterly, semi-annually, or even just once per year will keep you accountable and help you make sure your shelves aren't full of pointless product.
This doesn't just mean a physical inventory reconciliation, mind you. You don't just want to count what's on the shelf, but ask questions like, "Is this the most profitable product I can put on this shelf right now?"
Serving a hot bowl of chowder in your restaurant is excellent... but not if it's 100 degrees outside. Yo-yos are fantastic toys... but are selling pretty poorly right now compared to fidget spinners. Candy canes are generally quite profitable... in December.
You get the idea. Your inventory needs attention! It needs input and analysis. It changes with time and circumstance. Don't be content to rely on what's easiest. Scratch below the surface and rely instead on what the numbers say is profitable.
An optimized inventory means a business that's dynamic and changing appropriately along with the environment it's in. But, it also means you're not subject to every trend and whim. You go where the numbers tell you to go and where your customers have signaled they're going to be.
Inventory management software is helpful but rarely goes beyond the basics. We've built reliable tools to help you not only manage— but analyze and optimize your stock, day in and day out.
Right now, Shopventory offers a 30-day full-featured free trial of our service. Shopventory is even backed by a 30-day money back guarantee. That means you get a total of 60 days risk-free!
You can start a trial now with no credit card required. Thousands of merchants all over the world use Shopventory to optimize inventory and we can help you do the same!