Running a small business requires precision because your margin for error is exceptionally thin. While larger competitors have more resources to spare, this means small businesses have to work even harder to carve out space in the market. You’re also more susceptible to inefficiencies such as with inventory management. In fact, 46% of small businesses don’t use an automated system to track inventory.
With the rapid change in retail, proper inventory management can make or break sales. For small businesses, these minor disruptions can snowball into other costly problems. In fact, a survey found 7 in 10 online shoppers say they will look for an item elsewhere rather than wait around if your site lists it as out-of-stock. With this in mind, this is why an accurate inventory scale is critical for success fulfillment.
Why Inventory Management Matters So Much
Low inventory can lead to missed sales opportunities. However, a larger consequence to smaller businesses is damage to reputation. If customers receive a delayed purchase, they will likely become frustrated and significantly less likely for future sales. If you’re a manufacturer, running out of materials can lead to delays, while having the same operating cost. That being said, issues can also happen when you store too much inventory. Excess stock can increase carrying costs and the products can potentially drop in value by sitting on the shelf for too long.
Strategies For A Balanced Inventory
Firstly, consider using inventory management software. It provides transaction histories and can allow you to predict factors such as seasonality when ordering inventory. You can also use tools such as barcode scanning to keep track of your inventory in real-time. Of course, something as simple as making sure all your inventory is organized neatly and placed in the correct position.
There may be larger competition, but a well-optimized warehouse can help keep up. If you are interested in learning more, check out the resource below. It provides a few more examples of why properly managed inventory is so crucial for your smaller operation.
Infographic created by WSI, an eCommerce fulfillment provider