Online startups run just like any other business, but all business is conducted online. With online stores becoming more popular with each passing year, the online retail industry continues to evolve. However, there is one aspect of the business that will always be important—good inventory management.
No matter whether you run a brick-and-mortar store or an online business, you’ll always need to deal with physical inventory, which means having a warehouse, stockroom, or another dedicated area.
Inventory management can be simple, or it can be tricky, depending on the structure and size of your business. You’ll not only need to deal with storage, but you should know which products are in demand and which aren’t so that you can save space and money. Here are tips for effective inventory management for your online startup.
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Organization can look like many different things depending on your business. For example, if you sell products through the Amazon FBA program, you need to make sure that you follow the rules and regulations and send the proper inventory when necessary. It also means getting FBA inventory reimbursement if an item is lost or damaged at the facility or by an Amazon carrier.
While you should keep your products organized, you should also keep your paperwork and documents organized so that you can stay on top of your inventory, finances, and business management.
When organizing your products, always keep similar products on the same shelf or at least in the same area. If you don’t sell enough products to have a full warehouse, make sure that you have detailed lists to tell you where items are stored. If you have a warehouse, you should sort by product category to make things easier to find.
Get Inventory Management Software
While many small businesses can succeed with a few spreadsheets, large businesses need to upgrade to high-tech solutions to manage their inventory. As your inventory grows and you hire more people to be responsible for inventory count, you should have software in place to help them better collaborate and ensure accurate numbers.
Inventory software can help businesses of all sizes manage inventory with a cloud-based tool or mobile app so that it can be used while your employees are working hard. These systems will streamline your entire inventory management process for accurate record-keeping and save time and money.
Use Barcode Scanning
As a small business with an online store, you may process thousands of orders per day, which means that eventually, you’ll fall victim to human error. Keeping track of your inventory with a barcode system can help you improve accuracy and decrease costs associated with shipping the wrong product.
Mobile barcode scanners can help pickers avoid shipping the wrong product and prevent things from getting misplaced.
Inventory data can tell you a lot about your business and help you improve it. By analyzing data, you can determine past purchase orders, sales data, and order frequency, which can help improve your purchasing.
If you over-purchase, you’ll have too much inventory, which takes up space and requires money to store. Under-purchasing means that you won’t sell products to your customers, which is bad for business.
By analyzing your warehouse data, you can learn when you need to reorder a product and how much of that product you should get so that you never run out of stock.
Even if you believe that your inventory management system is perfect, you should always find ways to improve it. Improving your inventory management can help you improve shipping times and result in happier customers, so there’s no reason to stop looking for solutions until you’ve accomplished all of your goals.
Perform audits regularly to make sure that your data is always correct. Your audits should include looking at data from your financial management system to inventory information. Make sure that you compare the data on your online shop to your inventory data to avoid accidentally selling a product that you don’t have in stock. By always looking for ways to improve and ensuring correct data, you can help your company succeed.
There are a lot of factors involved with running a successful business, and inventory management is a major one. Use these tips to improve your company’s inventory management and optimize profitability.
Featured Image by Jens P. Raak from Pixabay