Are you underestimating the effect that mismanaged inventory can have on the success of your small business?
So, if you have not been paying attention to your inventory-related processes and operations, here are a few common mistakes you should watch out for—and a few simple solutions for preventing those mistakes in the first place.
It Takes Too Much Time to Find Products
Are you spending countless minutes or even hours trying to track down products to fulfill orders? If so, Entrepreneur explains you could be wasting one of your most valuable resources! A poorly organized warehouse can lead to losses in both profits and time, so if this sounds like your company, you should consider reorganizing your warehouse ASAP.
Customers Have to Wait Too Long for Orders
Other than wasting one of the most precious resources you have, failing to keep your warehouse or other product storage areas organized can also increase the amount of time that your customers have to wait before receiving their orders. From the moment they checkout to when they receive their order, delays can often be prevented with supply chain management improvements, but staying in control of your inventory processes is critical to preventing costly customer-facing mistakes.
Multiple Products Are Constantly Out-of-Stock
Do you know how much money backorders can cost your small business? Backorders can occur when your small business cannot afford to hold more product, or when there is an issue within the supply chain, or your lead time for reordering is skewed. If the costs of delivering on these delayed orders are more than the costs of keeping products stocked, the indirect and direct costs can keep your small business from thriving. To help make sure your numbers are on target and your timing is calculated properly, you can start utilizing barcode labels. Before introducing barcode labels to your warehouse, you’ll want to research which labels apply best to your industry.
Warehouse Space Is Constantly Overstocked
Running out of inventory can be costly for small businesses, but so can ordering too much inventory. Balancing your inventory needs to prevent shortages and excesses can be a tricky process, especially if you are a new business owner, but mastering your inventory processes is also the key to helping your small business succeed. If you do end up ordering too much product, Business.com notes there are profitable ways to handle all of that excess inventory, like B2B and bulk sales.
Customers Receive the Wrong Products
People can get pretty excited and anxious for their packages to arrive once they place an order. If they open the box and find that their order is wrong or items are missing, that excitement can turn into frustration fast. That’s why proper order management practices should be an integral part of your overall inventory management and control operations. Effectively controlling orders and fulfillments can prevent potentially embarrassing order issues from tripping up your business, and on top of that, it can also eliminate the inventory excess and shortage issues already mentioned.
Orders Are Lost Before Reaching Customers
Once an order is fulfilled and on its way to your customers, you may think that the potential for inventory issues has ended. In reality, however, shipping issues and mistakes can also damage your customer relationships and eat away at your margins. For example, if an order is lost in transit and you did not insure your shipment, your business could end up swallowing the costs of any included products. Not to mention that you will also need to allocate additional expenses, products, and resources to replace that lost shipment.
When it comes to preventing inventory mistakes, automated processes and improved fulfillment practices should be your primary focus. You also need to be prepared for damage control when inventory mistakes arise. The right balance of prevention and preparedness can help prevent inventory issues from sinking your small business.
Guest Post by Marcus Lansky
Photo Credit: Rawpixel