Inventory levels change every day. Each day, as you make sales, receive returns, generate new receipts, and keep track of damaged goods, the levels of products in your store go up and down. As a store owner, you may want to know: How much inventory must you order? How can you keep track of your goods in real-time? When is the right time to order more?
Welcome to Inventory Management System Guide! This guide will tell you all about the importance of inventory management and its key features to improve your store’s efficiency and increase customer satisfaction.
- 1 What Is Inventory Management?
- 2 What Is Inventory Management System?
- 3 What are Different Types of Inventory Management Systems?
- 4 What are the Features of Inventory Management System?
- 5 Why Your Business Needs an Inventory Management Solution
What Is Inventory Management?
If you are a shop owner or considering starting a small business in retail, you may be faced with this question: “What is Inventory Management?”
Inventory management refers to the process of tracking the number of goods in your store. It allows you to monitor the number of items you have in your shop, warehouse, shelves, and even with your distributors.
Besides, it reveals how many of each item you have in your stock. It also provides you with information on whether you could be running low on specific products or whether you need to restock more items in order to keep selling it.
Let us look at all the reasons why you need to buy and hold inventory:
- Protects you from unexpected shortages
- Helps you meet a sudden demand
- Allows you to build a safety net against late distributor shipments
- Purchasing in bulk quantities can save you money
- Continue doing business even as customers buy your products faster than your distributor can supply them
Knowing how much inventory you have, when you need to order more and at what price is the key to a successful retail business.
What Is Inventory Management System?
An inventory management system allows you to track and control your stock or inventory efficiently. As a busy small-business owner, having inventory knowledge is critical to your business. This is why it is essential to manage your inventory successfully.
An efficient inventory management system can enable you to make smart purchasing decisions quickly. A reliable inventory management system must allow you to:
- Cut down costs, improve cash flow and boost your shop’s bottom line
- Track your inventory in real-time at a glance, anywhere and at any time
- Help you to predict demand
- Avoid product shortages
- Prevent unnecessary stockpile
- Provide access from your retail point-of-sale (POS)
What are Different Types of Inventory Management Systems?
Every business uses some form of inventory system. We discuss three popular types of inventory systems below: manual, periodic and perpetual.
1. Manual Inventory System:
In this method, you need to track inventory manually by counting every item in your store. This can be challenging in a demanding and competitive business environment.
2. Periodic Inventory System:
You need to make physical inventory counts frequently. During the counts, you need to analyse your inventory changes based on the number of items sold and the number of items reordered.
3. Perpetual Inventory System:
In this method, you record every item at each stage of movement in your store. A perpetual inventory management system provides you with real-time information about your inventory.
What are the Features of Inventory Management System?
By now, you know how important it is to have the right inventory management system in your store. To help you choose the right system for your business, look for the following features:
Real-Time Inventory Updates:
Receive real-time updates on changes in your stock levels and movement of inventory.
Get intelligent reporting of your sales and information on reordered goods. This can help you to optimise your reorders and track your fast-selling products.
Multi-Channel Sales Support:
Get support for your online store as well. If you decide or have an online store on third-party sites, your inventory management system must integrate with these channels.
Multiple Warehouse Inventory Controls:
Get control of more than one warehouse or storage site and receive information on the number of goods across locations.
Planning and Forecasting:
Managing your inventory is all about the future and your present. This is why the right inventory management system must have built-in planning and forecasting features.
It must give you information on seasonal goods and consumer trends. This can allow you to accurately predict what your customers may need in the future and thus invest in the correct inventory at the right time.
Knowing how your inventory changes and the value it holds is vital to your shop’s operations. Get the right inventory management system that includes integrated accounting to get accurate and real-time information on your financials.
For those who have both offline and online store, having an integrated POS system is essential. It can allow you to sync all item purchases and stock details and immediately update both offline and online channels.
Why Your Business Needs an Inventory Management Solution
Knowing how much inventory you must have at all times through the right inventory management system will make your business much more efficient.
Simplify your business with Zadinga’s powerful shop management system with integrated inventory management. Get your stock back on track, build your business and delight your customers. Get in touch with us today!