If you have started your retail business, well, first, kudos to your success. It’s so understood that success doesn’t come easy. You have planned to invest, and most of the retailers have already spent a lot till they start looking out for an inventory management software.
‘An inventory is considered to be the backbone of a retail business!’
If you understood the previous statement, you have now understood what your next destination is. All you need to decide is what all you need to get there.
So, all this starts with you getting hands on a better understanding of how to grab the best from inventory management software available online. This article should be a guide to help you learn more about inventory management software, its functions, match it with your business needs and see how can it refine your daily business operations.
Before you start to roll your eyes below, understand that you can never cater your customers well with an imbalanced inventory. To rectify, continue reading…
1. Understand your stock control needs
Before you try to showcase your product in front of your customer, you need to first know what product it will be. Try to understand and prepare a list of the products that will be a part of your inventory. This will make you to not store unnecessary items and over-stock your inventory. For that, you need to analyze and evaluate the efficiency that you currently have; improvise.
It’s pretty simple. All you need to do is, prepare a survey form for yourself being a stranger (if that’s difficult, ask someone else to do that). You will come across many such questions wherein you will be able to identify the loopholes in your present system. Some are below:
- How frequently do you run out of inventory?
- How many times have you lost money/customers because of over- or under-stocking?
- If you had a systematic approach to your inventory management, was barcode ever a part of it?
- Do you keep a note of the inward and outward of your stock? Do you keep a note of the location of your stock in your warehouse?
- How much time does your staff spend on the above-mentioned question?
- How frequently do you audit your stock?
- Did you ever create an analytical report of your sales? If yes, how did you improvise? If no, why not?
- Your customer feedback, how does it help you? In what ways do you consider it?
All the answers to the above-mentioned questions are the reasons for you to opt for inventory management software. Just for an example, if you’ve been running out of inventory since quite a long time, reasons will never be the same for this problem. Reasons are never in your hand, but make sure that they are always in your reach. An inventory management system will take care of this.
2. Try to analyze the value of the inventory management software
Your inventory is an asset, a valuable one. Thence, the software that is managing it must be valuable as well. Your focus will then be 70% on the software and 30% on the inventory because you are already opting to manage something that will be managing your inventory. An inventory management software will add a cherry on the top to the reputation of your business and your relationship with your vendors & customers.
While you analyze the value of your inventory, the below pointers will prove out to be the gentle music to your ears.
Forecast your future inventory
The most important part of your business will always be analytics. When it comes to figuring out how the inventory is required to be replenished, the forecasting of your sales is very important. Analyzing the sales is always better than assuming what you have to order for your inventory. Assumptions will always lead to you blaming yourself if there is over- or under-stocking. Forecasting will give you a perfect picture of what needs to be brought in. Be as blunt as you can with yourself here; it’s about what your customers want from your business, not you.
Tailor your product prices
An inventory management software will always help you to check the sales behavior of all the products that you have in your inventory. In case you notice that the sales behavior of your product is amazing, the inventory management software will assist you in moving ahead with some promotional offers to grab as many customers as possible.
Give your logistics a boost
An inventory management software will help you track stock and the orders to be delivered to your customers. Implementation of the barcode system in your warehouse can be a boon; it enables workers to easily track the incoming and outgoing stock by simply scanning the code. On the other side, RFID tags can help in tracking stock location and movement. There are cases when the customer cancels or returns the product, in such circumstances, the seller has to make sure that the product reaches back to its position in the warehouse. An inventory management system enables you to integrate with global shipping agencies to make your shipping smooth.
3. Once the value is analyzed, try to fish out the costs of your inventory management software
Well, for your business to shine and earn money, you need to invest. An inventory management software will certainly give you the ROI that you have expected, but the ‘investment’ needs to be pre-defined.
Define the range of your investment for the software
Inventory management software ranges roughly from $50 to ~$4000. You need to figure out what features are valid or useful for your business. For example, Orderhive’s price range starts from $50 which is most basic with two storefront/marketplace integrations. Then comes a $100 package which offers four integrations, and $150 with six integrations. If there are more features that are to be added, Orderhive Enterprise becomes the best-pick to craft the inventory management system with custom-made features.
Get insights to your own business
You need to figure out the gross margin, shrinkage and the turnover of your inventory. You need to create a report of your annual business expenses, which will guide you to evaluate the amount you need to invest in software. It’s always good to grab a trial of an inventory management software, to understand how it can cater to your needs, how many loopholes it can cover and how badly you need it.
4. You need to choose an inventory management software wisely, how?
When you search for inventory management software, you will come across tons. Make sure that you answer the below mentioned questions. They will help you decide how to move ahead…
- How many employees from your organization would require access to your inventory management software?
- It would be just me using the software
- There would be around 2 to 10 employees
- More than 10 employees would be using the software
- How do you define the size of your business?
- 1 or fewer stores
- 2 to 5 stores
- More than 5 stores
- Do you have stores at multiple locations and do they require advanced promotion?
- Nope, I just have one store
- Yes, I do have multiple stores but I don’t really know if they require promotion
- Is your business active on multiple channels (social, in-store, mobile, etc.)?
- Not really! I just have one store, that’s it.
- I do have a store and a website/application, but they aren’t well connected
- Yes, I do have my business activities across multiple channels
Now, let’s analyze your requirements based on the answers that you have provided. As given, your requirements will be segregated into three categories.
If you have chosen ‘a’ in most of the questions:
This means that your business is in a growing phase. Not too many features are required when it comes to your inventory management software. All you need is a reliable, efficient and cost-effective software. In this case, Orderhive’s starter package will be a jumpstart. Once you are all set with it, try focussing more on how to expand your business, rest will all be managed!
If you have chosen ‘b’ in most of the questions:
You have already stepped in the competition and are all set to make it big. Here, your business is standing amidst medium- and large-scale enterprises. Your requirements are higher comparatively but not as high that you would require a custom made inventory management software. Orderhive’s professional package will be the perfect choice for your business.
If you have chosen ‘c’ in most of the questions:
Well, kudos! You have reached a point where you have all the right to say, “Yes, my business is booming and I want to get my hands on software that can manage anything when it comes to my inventory.” In this case, Orderhive’s growth package will be the right pick.
If at all you still feel that there are things missing which you might require, you can always get a tailor-made software crafted for you with Orderhive Enterprise; the way you want it to be!
5. You now have figured out what software you need; time to deploy it into your business
So, now, after all this research and hard work, you might be planning to sit back and relax. Well, there is one last tiring junction of your trip remaining. Whatever you fished out – we know it’s the best – it’s now time to implement.
The inventory management software is awaiting your orders to start getting into your business’s nerves. All you need to do is start feeding in your products details, allocating them the SKUs and listing them on or importing data from all the channels that you are planning to integrate or sell on.
Barcode system will be a blessing, try to improvise by using it. This will help you to directly input the product details in the inventory management system and synchronize all the channels with your present inventory.
You need to decide what your threshold limit or reorder point would be, for every item present in your inventory. Now, this can only be decided with proper sales forecasting. Once you generate the reports from your system, you can work upon quantity of the stock that you want to order or replenish.
You have successfully tackled the problems occuring between you and your end-customers. Now is the time when this inventory management software helps you to coordinate between you and your supplier. It will help you to create the purchase orders and send them to your suppliers so that they can be notified about the stock replenishment you require.
Well, that’s all about how to get your hands on a state-of-the-art inventory management software which fits your business needs. For more assistance or a trial of Orderhive, click here.