One of the most challenging aspects of running a business that sells products is managing your inventory. You need a way to make sure that you aren't letting your products get stale on the shelf. They need to be moving out the door, clearing up space for the next round of items to sell.
But what if you are having trouble managing your inventory? It's important to understand the way items move through your store. Here are some ideas for managing your inventory as a business owner:
Track What Sells
The first step is making sure you understand what sells. Track your inventory regularly to get an idea of what is popular with your customers. You can order more of what seems to move off the shelves regularly and order less of what doesn't seem to be selling as well.
Keep track of what happens when you try a new product line. Pay attention to how long it sits on the shelves so that you can gauge the success of the items. There are inventory management apps you can use to help you pick out patterns so you are more likely to be successful.
Get Rid of Inventory that Doesn't Sell
Not everything is going to be a success for your business. Unfortunately, you might end up with items sitting on shelves. When you are stuck with surplus inventory, there are some ways to get rid of it, including:
- Bundling it in with more popular products so that it sells at a discount.
- Giving it away as an incentive to sign up for a program or for some other reason.
- Liquidate them or sell them online to get rid of them, even though you might not make a profit.
- Donate and take the tax deduction.
If the important thing is to free up room on your shelves, you might be better off getting rid of the inventory as soon as possible in order to keep other products available. Once you get rid of the excess inventory, you can use what you learned from tracking what sells to make better decisions going forward.
Drop Shipping and On Demand
Another way to manage your inventory is to avoid carry items in the first place and focus on drop shipping. This works well if you are mainly an ecommerce business. You can arrange to have someone else take care of the shipping on your behalf. In many cases, this just means that someone else handles the shipping when an order is placed. Drop shipping is one way to ensure that you don't end up with excess inventory.
A variation of this is on demand arrangements. This works well with items that you assemble, or with things (like books) that you can sell online. Rather than keeping inventory, the ordered items are produced when there is demand for them. I chose Amazon because of the print on demand capability that allowed me to have my book published without needing to spend the money to buy a number of copies up front. This principle can work with your business as well, if you assemble items by hand or if you plan to sell books.
Carefully think about your inventory needs, and look for ways to avoid stockpiling so much inventory that you become inflexible and that you don't have room for new items that could be money makers. Manage your inventory so that you can stay in business for a long time.
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