Guest Blog Post: Marcus Lansky of Abilitator
As a high growth Supply Chain consulting service company, T Exponents is committed to helping small businesses and individuals like Marcus Lansky of Abilitator. It is important for us to help each other, especially during these challenging times.
Marcus Lansky of Abilitator.biz is an entrepreneur and small business owner who was born with a severe spinal condition, Marcus took the challenge to be able to walk again. With the will and aid of numerous individuals from the medical field and supporting friends and cheerleaders, he was able to take his first steps and take on the world. He then created his company (Abilitator) and website (abilitator.biz), as a way to reach out and help those who are disabled and show them that becoming an entrepreneur is a very achievable goal.
How to Avoid Costly Small Business Inventory Management Problems
July 2020
Introduction
Good inventory management is crucial to the success of your small business. Without a solid inventory management system in place, you can run into serious problems, many of which can cost your business missed profits and lost customers. Running out of stock, holding obsolete inventory, mixing up customer orders — all of these issues are avoidable with the right inventory management plan in place. So, here are some common inventory management problems and how to prevent them from hurting your small business.
Lacking an Inventory Management System
If you do not have an inventory management system in place, now is the time to set one up. To get started, you will need an inventory ledger where you can record sales and keep track of your total inventory numbers. There is no need to do this manually! Web-based inventory management software will streamline this process and help you avoid data entry mistakes.
You can always hire a freelance inventory manager or business consultant to help implement your inventory management system and set up a process that works for you. If you want a personalized inventory management dashboard, consider hiring an e-commerce specialist to build you a custom system. The best freelancing sites like Upwork can connect you with top talent that can help you with your inventory management needs.
Overstocking
Good inventory management ensures you always have in-demand products in stock without wasting expensive storage space on slow-moving inventory. Holding too much inventory is not just a storage issue. Your inventory may go obsolete due to changing trends or technology, or it may deteriorate over time — especially if you are stocking perishables. Overstocking also ties up your business capital, so you cannot invest it back into your business. You may even have to sell some of this excess inventory at a loss! Monitoring the movement of your products over time will allow you to identify items that your customers don’t order often.
Understocking
On the flip side of overstocking, businesses also risk running out of products. Understocking can cost you in missed sales and even hurt your brand reputation. According to Retail Dive, retailers across North America are losing nearly $1 trillion in sales due to understocking!
Good inventory management will allow you to keep an eye on top-selling items so you can keep them well stocked. Some inventory management software will even let you set reorder triggers, sending you an automatic alert when your inventory falls to a specified level. You can also use your inventory management system to keep track of profit margins, so you can negotiate with your suppliers for better deals on items you order a lot.
Human Error
Human error can affect any part of the inventory management process, from recording incoming supply orders to updating sales information. Errors in data entry lead to inaccurate information about your remaining stock and product popularity, as well as indicate whether your promotions are working. You may even wind up sending the wrong items to customers! You can also run into problems when receiving stock from suppliers. Failing to check your incoming order or otherwise entering new stock incorrectly will lead to serious problems down the line.
To avoid issues with human error, integrate your inventory management ledger with a point-of-sale system that will automatically update product data with each sale. As Houston Chronicle explains, it’s also a good idea to audit your stock with regular inventory counts. These are important for discovering errors, identifying flaws in your process, and checking for signs of employee theft. A great employee training process can also help mitigate the risk of errors in your inventory management system.
Inventory management is an important factor in the financial success of your small business. Even if your business is just getting off the ground and you don’t have a lot of inventory to keep track of right now, an effective investor management system will streamline your daily responsibilities and set your business up for scalable growth in the future. Do not overlook the importance of good inventory management!