The key goal of most entrepreneurs and business owners is to grow and expand their business. But in today’s times, where the economy has a sluggish growth and lacks lustre, growth and expansion of a business has become a tough nut to crack. In such a scenario, one thing that can help you in building a bigger retail business is Inventory Management.
Inventory Management involves the supervision and detailed record of every newly arrived or returned item that enters or leaves the place of storage or sale. This system will aid in keeping a tab on the sold and available products, as well as help you in managing the stock so that you never run out of it. Inventory Control, an area of inventory management, focuses on cutting down the total cost of storing unsold goods while increasing the ability of the retailer to provide the products on time to the customers.
Inventory Management is a vast system that covers the different aspects of a retail business like pricing, forecast of inventory, money required for storing inventory (unsold goods) and restoring exhausted products, space management for storing the unsold goods, inventory status, forecast of demand and sales, and policy and processes of shipping, exchange or return of goods.
Importance of Inventory Management
With the penetration of e-commerce into the market and a boom in the retail industry, it is necessary for every retailer to have a timely availability of products, as the customers won’t wait or hesitate in moving to another retailer for what they need. Inventory Management will help retailers in the following ways:
- It will help them in keeping a track of and manage your stock of products.
- It will allow them to build a digital inventory management system for the tasks that are repeated the most like the information about ordering, shipping, and delivery of products, the finances involved, etc.
- The digital system will also be able to predict the demand of different products based on the historical data, user inputs, and status of the inventory.
- It will allow them to optimize their range of products and create a narrow inventory. This will improve their stock management, remove the chances of products getting expired or becoming difficult to sell, and will also decrease the warehouse costs.
- It will help them in optimizing the products before diversifying them to be more suitable and attractive for the buyers.
Software Systems for Inventory Management
Earlier, the Inventory Management software systems were simple spreadsheets but now they have become more multiplex. These software systems are nowadays integrated with accounting and ERP systems which supervise the products in inventory even across several different locations. Some of these software systems are designed for big enterprises and might be largely customized for their particular requirements. The software also always keeps an accurate assessment of the price of the goods by calculating the costs in multiple currencies.
With Inventory Management, you can work towards growing and expanding your retail business and expect greater revenues for your hard work.