Are you currently running a small or medium-scale business and think there may be an issue with your inventory?
Inventory management is an essential part of any successful business, as it ensures that you have access to the right products at the right time. This, in turn, optimizes costs and helps to keep your customers or clients happy. So, when inventory management goes a bit off the rails, it can have a significant impact on your business, and you may even find that you begin to lose customers.
With that in mind, if you are not sure if you need to update your inventory system or look for new wholesalers, read on, as this article will walk you through some of the key signs that there’s an issue with your current inventory management method.
Frequent Low Stock
A clear sign that you may have inventory issues is that you frequently run out of stock. If this is the case, you are not only going to be losing sales, but you also risk alienating any loyal customers that you may have. Stockouts are often the result of poor forecasting, inadequate tracking, or a failure to re-order inventory from a bulk supplier like godirectwholesale.co.uk in a timely manner. So, if this is something you’re facing weekly or monthly, it may be time to up the amount of produce that you order or look for a new wholesaler.
Excess Inventory and Overstocking
On the other side of the coin, you don’t want to have too much inventory. Overstocking ties directly into unsold goods increases storage costs, and can lead to product obsolescence. This is particularly true if you are selling perishable goods or you have items that are only appealing for a set amount of time due to seasonal demand. So, if you have too much stock, you need to update your inventory systems and look at the forecasting software that you are using, as it is clearly off!
High Holding Costs
Many businesses that have an issue with their invoicing will face escalating holding costs, which can include expenses for warehousing as well as insurance and appreciation. The higher holding costs can point to an inefficiency in your being able to manage your stock levels efficiently. This can in turn eat into your profits and can point to an underlying lack of coordination between you purchasing goods to sell and the shop floor.
Inaccurate Inventory Records
Do you notice inaccurate inventory records regularly? This is a red flag, and if the numbers in the system don’t match the physical stock, it can become nearly impossible to make the correct decisions about purchasing, sales, and, if you make your products from scratch, production. This can stem from human error or an outdated software system.
Unhappy Customers
This is the last thing you want as a business owner, but if you have issues with inventory, this can look like declining customer satisfaction. Why? It can be due to delayed deliveries, incorrect orders, or simply an inability to meet demand, which can cause your customers to become frustrated and even harm your business’s reputation. If there are frequent complaints about the availability of products or long delivery times, then this is a sign that you may need to look into your inventory system.
