What Is Inventory Management? How To Do It? 5 Things You Must Know

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Inventory management is one of the main tasks for shop management. Managing the stock means controlling the flow of goods, knowing what type of goods you have stored and the quantity, what is the state of that goods, what is going out more and less, when you will need to contact the supplier again. 

Good inventory management helps you make decisions that impact shop management and result in more efficient processes and lower costs. To do this, you can count on the help of spreadsheets, software and even applications. A well-managed inventory is one of a company’s most valuable assets.

Why Is Inventory Management Important?

Well-done inventory management is directly linked to your company’s efficiency and financial health. Let’s see some reasons why it is so important to manage inventory correctly:

Identifying Market Demand

To not take a loss, it is essential to know what kind of merchandise is going out and what kind is running aground. If a product has been in high demand, it is good to check the stock before calling the supplier and avoid unnecessary expenses. Stay tuned to find out the best time to replenish stock.

Don’t Lose Sales

Whoever manages the stock well is continuously supplied and doesn’t lose sales. No customer likes to order merchandise that could be in stock. 

Avoid Losses

Inventory management helps identify what is not selling and what is good and cannot be missed. Knowing the stock well avoids losses and even helps to take advantage of possible discounts from the supplier.

Plan Sales

If you know exactly how your stock is, you will know when to buy that merchandise that sells well at a particular time of year. You can’t wait for customers to start asking and only contact the supplier. It is essential to plan the sale in advance.

Plan Production

If you not only sell but also produce merchandise, you should not neglect your inventory. Don’t miss out on raw materials. The machine stopped equals loss.

5 Things You Must Know

There’s no need to neglect the stock if you’re small. Let’s take a look at some best practices:

Make Inventories

Know precisely what you have in your stock and organize everything with care to streamline processes. Don’t forget to check the expiration date (if any). You can use spreadsheets, inventory management software, or even pen and paper when it comes to inventory.

Highlight Important Information

Have essential information at the tip of the pencil to make decisions: such as reference number or control number of the goods, cost, manufacturer, category, location, expiration date, etc.

Pay Attention to Costs and Revenues

Know what makes a profit and what makes a loss. Prefer the products that make the most profit and know which ones are the worst performers. Control discounts.

Manage Your Inventory with A Single System

By choosing a single management method or system, you centralize information, automate processes, reduce errors, learn about incoming and outgoing items and monitor your inventory.

Track Sales, So You Never Run Out of Stock 

If an item is selling a lot, call the supplier and don’t risk running out of stock. Plan yourself. Don’t forget what you bought long ago and couldn’t get out. This will help you make better decisions in the future. Keep an eye on the expiration date, so you don’t lose merchandise.