If you’re staying on top of your inventory, you’ll be able to make more sales and ship goods to customers more efficiently. Follow our list of inventory tips to ensure your business thrives all year round.
Plan ahead
With the end of year rush fast approaching there has never been a better time to evaluate your inventory levels. You’ll need to do some forward planning to ensure you have enough products for festive season shoppers. You may want to consider factors such as:
- How many customers do you expect to serve during December/January?
- Do you have enough stock to satisfy these customers?
- How quickly/easily can you get extra stock if you run out?
- How long will the stock last for?
Achieving a balance between under/overstocking can be tricky. Try pre-selling to customers or negotiating with your supplier for bulk discounts to hedge your bets.
Get products 'just in time'
A 'just in time' - or JIT - system automatically orders more stock when inventory reaches a certain level. The JIT system was invented by Toyota as a means of ensuring they always had the right amount of car parts available. JIT systems work best in conjunction with a smart labelling system to ensure your inventory details are accurate. A JIT system can be fantastic for small businesses with large stock turnovers, like fresh food industries or retailers.
However, just because you have implemented a JIT system, doesn't mean you can ‘set and forget’. You will still need to monitor your stock levels to make sure they reflect the demands of your business throughout the year.
Product life
Most products have a certain lifespan. For example, coffee beans are best consumed within 4 weeks of roasting. This is referred to as ‘normal spoilage’. In other words, it’s a measure of the time it takes for a product to become 'spoiled' and unusable. Understanding the lifespan of your products will help you plan how much stock you need and when you need to use it by. However, it’s near impossible to have zero spoilage, which is why businesses have 'warehouse clearances' and 'end of season sales.'
If you notice that some of your stock is getting close to expiry, consider selling it at a discount or finding a way to use it up.
Organisation
A big part of inventory management is efficient organisation.
Organisation starts with your physical space: how much do you have? How is it laid out? How will you get stock in and out? Consider the importance of each stock item and the flow of people in and out. Put your most used stock where it is easily accessible and viewable.
Think about the optimum environment for your stock. For example, does your stock need to be kept cold and dry? Maintenance of such a facility is critical, as cold rooms can attract mould and mildew if not properly cared for and fixing it down the track can be more expensive than regular upkeep.
For some fantastic inspiration for clever inventory management, consider the example of Amazon.com. Amazon delivers millions of orders every day to all corners of the earth – all within strict deadlines. Amazon pioneered a system where stock is grouped according to its popularity, rather than type. This allows the most commonly sold products to be found speedily.
Summary
Smart inventory management is crucial for small businesses. After all, if you have nothing to sell you can't turn a profit. Be sure to plan your stock needs well in advance so that you can maximise your sales and efficiency.
Do you need money for inventory? Or are you worried you will be left short during the end of year rush? Valiant has quick and easy business finance options for you to explore. Give us a call on 1300 780 568 to speak to an expert about your options – we'd love to chat and help where we can.
Nathalie is the Communications Manager at Valiant Finance. She has a double degree in Journalism and Law, and a background in the fintech space, hailing from Asia's largest fintech hub, Stone & Chalk.
Related Posts
A successful finance application starts with a healthy credit score. Click for seven practical tips to improve yours today.
Does working remotely work? The stats are in! Here’s how our idea of work-life balance has changed, and whether it will stick.
Finances hit hard by Covid? Click to learn more about hitting pause on your mortgage repayments, and other ways to relieve financial pressure.
Who saw 2020 turning out like this? No one. But that can only damper our spirits for so long.
COVID forcing you to rethink your business model? Here are five practical steps you can take to cope with new challenges and changing needs.
While no one planned for COVID-19, there’s a plan in place to keep SMEs afloat. Here's what you need to know.
A minor setback can be challenging, but there's no reason to let it derail your business goals. Here are a couple of coping strategies to keep you moving.
Put your best foot forward by preparing strong answers to these 4 questions.
A little preparation goes a long way. Get ahead on the finance front with our quick tips to help you with the 3 key areas of your loan application.
Cut through the confusion. There's so much talk around credit scores and what they mean; it can be hard to seperate fact from fiction.
The time arrives in most small businesses when you’re required to borrow money. So, how do you get 'business finance ready'?
We sat down with Neil Slonim, The Bank Doctor, to find out what he thinks about Australia's fast-growing online SME lending market.
Finding the right business loan doesn’t have to be difficult. See how we helped Mark’s Wholesale Steel Business find the right business loan for them.
How do you attract new customers to your business? Where do loyal customers come from? It all starts with your SMB online strategy.
The path from personal trainer to business owner can be both challenging and rewarding. Check out our top tips for making the transition.
Want to reach your customers online? Are you ready to digitise your small business? First up: get smart about social.
Don't let angry customers stay angry. Protect your business' reputation with these simple tips and tricks for delivering exemplary customer service.
Every business is unique. Every business loan is different. What features are most important to you? Consider these 4 things before applying for finance.
Have you explored your trade finance options? Premiering your business on the world stage may be within reach.
Your guide to smart inventory management for every season.
Get more customers and keep them. Here's the low-down on setting up your very own customer loyalty program.
You've explored your business finance options. What do you do next? How can you be sure you're comparing loans effectively and getting the best deal?
Want to expand your team but don't know where to start? Here's our guide to hiring great employees, featuring tips from industry leaders.
A Unique Selling Proposition (USP) is fundamental for any business looking to grow. Learn how to develop your USP and stand out from the crowd.
Are you invoicing your B2B customers with longer payment terms? Is it hurting your cash flow? Debtor finance could be a lifesaver between payments.
With so many business finance options to choose from, how do you know whether working capital is right for your business? Start by reading this.
Are you ready to refinance? Reviewing your business loan every 2 - 3 years can save your SME a lot of money. Here's what you need to know.
2018 is your year. Here are 7 quick tips and tricks to get back in the driver's seat when it comes to battling business debt.
Improve your chances of locking down the perfect business loan. Here are 19 business funding mistakes to avoid when you're applying for commercial finance.
Setting up a business is hard enough, without getting stung with unexpected costs. Here are the things you should be thinking about before you dive in.
Getting the best rate is all about asking the right questions. Have you done your research? Here's where to start and why.
"Ok, I'm eligible for the R&D tax incentive. But how do I actually claim it?" Here's what you need to know.
You could be missing out on a tax offset of 45 cents in every dollar. Check your eligibility for the R&D tax incentive today.
Need to raise cash for your business? We explore the use of debt versus equity, and how to decide which one is best for your business.
Reward points can add value to your business, but it's not one-size-fits all. Here's what you need to know.
Here's the million dollar question: will you start up a company or will you establish yourself as a sole trader? Get the full story.
Valiant Finance is a small business dedicated to supercharging the growth of other small businesses through access to funding. Here's what we've learned.