Is inventory control a major bottleneck for your small business? Inventory management is a common growing pain as small businesses outgrow old-fashioned pen-and-paper inventory systems but have yet to adopt automated inventory management. However, while you might think your small business isn’t ready for an inventory overhaul, clinging to outdated systems can ultimately cost your businesses more than it saves.
In this article, we’ll address some of the most common inventory management problems faced by small businesses and affordable ways to solve them.
Slow Order Fulfillment
Whether it’s due to a disorganized warehouse, stock-outs, or mis-picked orders, slow order fulfillment can seriously hurt a business’s reputation in the era of free two-day delivery. Two-thirds of customers expect online orders to reach their door in under a week, and one in three expect delivery within two days. When retailers promise a speedy shipment and fail to deliver, customers chalk it up as a bad experience and look elsewhere the next time.
Luckily, most fulfillment delays can be solved by simply getting your warehouse in order. In addition to eliminating clutter, businesses should organize so their most-frequently accessed inventory is up front and use labels and signage so everything has a place. Labeling individual slots with barcodes eliminates manual picking errors by giving warehouse employees a way to verify items before selecting.
Stock-Outs and Overstocks
Both too much stock and too little are expensive problems for small businesses. When the shelves are bare, you lose sales and send shoppers to competitors. When carrying too much stock, you lose money to warehousing costs, dead stock, and shrinkage.
There are two main causes of stock problems: Data entry errors and poor forecasting. Luckily, both have the same solution: a barcode system. A barcode system reduces human error by taking manual entry out of the picture. It also speeds up the inventory process so you can perform cycle counts rather than counting inventory only once per year.
Barcodes are an ideal solution for small businesses because they’re affordable yet flexible. Barcodes are efficient whether you’re dealing with a few hundred units or several thousand, and whether you’re working in an office or an industrial environment, you can buy barcodes made from materials that last. You have options when it comes to scanners too. From inventory management apps that let employees scan barcodes with smartphones and tablets to wireless handheld scanners, there are solutions that fit your business’s budget.
Selling inventory you don’t have in stock is primarily a problem for e-commerce and multichannel merchants, but when it happens, it can be seriously damaging to the customer relationship. Oversold inventory happens when the data in your point-of-sale system doesn’t match current inventory levels.
While some businesses hoard safety stock to prevent overselling, there’s a better way to ensure you’re working with accurate inventory data. By pairing barcode scanners that upload data in real-time with cloud-based inventory software, businesses can keep counts current at all times. That means finally upgrading from the Excel spreadsheet you’ve been relying on for the past few years, but don’t worry — you don’t have to spend a fortune. Cloud-based solutions like Zoho Inventory start as low as $39 a month for small organizations, but there are options for every business size and budget.
It’s easy to let inventory management become an afterthought when you’re focused on growing your business. But the truth is, inventory is at the core of any small business. When inventory isn’t running smoothly, it causes problems that cascade throughout your business, from reduced productivity to declining customer satisfaction. Instead of letting inventory issues keep a stranglehold on your small business, take steps to upgrade your company’s inventory management infrastructure before inventory mishaps become a major problem.
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