Inventory tracking and simplicity don’t always go hand in hand. As a business owner, keeping the right amount of products in stock is not always an easy task. However, tracking your inventory is a big part of inventory management for a retail or wholesale business. Poor inventory tracking would lose you and your company money. Here, your troubles will be solved with easy inventory tracking tips to save money.
Research Specifics About Your Product
Whatever it is your company is selling, research it. Look into how other businesses successfully sold similar products. Try to get a sense of how much of that product they sold. Research how many people are looking to buy such products. These types of research topics will help you to determine how much of a product you should have in stock. This will help keep your inventory tracking system clean and easier to maintain. Getting a sense of how your products will sell will help you to save money.
Set An Inventory Goal
After researching, it’s a good idea to set a realistic inventory goal for each product you’re selling based on your research findings. Using data analysis tools, you will be able to ensure that you have an appropriate amount of your product in stock. If your research was done properly, you will most likely be able to predict the journey of your inventory. Planning for the future will make tracking easier and save you money by not having too much or too little inventory (AKA wasted money).
Establish An Inventory Turn Goal
Speaking of the importance of planning for the future, establishing an inventory turn goal is essential for success. Turning your inventory is necessary if you want to save money. You should be trying to turn your inventory as many times in a year as you can. Try setting a goal of 2-4 inventory turnovers per year. Avoiding having a lot of money tied up in your company’s inventory will save you money.
Follow The FIFO Method
The first-in, first-out method (also known as “FIFO”) is critical when it comes to properly tracking your inventory turnover. The best part is that it’s a very simple method to understand. Whatever your business has in stock first should be the first to be sold. This is beneficial to all types of businesses. Even if the products you’re selling do not have expiration dates, they will eventually go out of style one way or another. Keeping track of your oldest products and guaranteeing that they go first will prevent you from having dead stock. Not having dead stock will save your business tons of money.
Know When To Stop
Knowing when to stop stocking products is possibly the hardest and most important tip to follow when tracking your inventory. If you have a product that hasn’t sold in over 6 months, it’s time to stop restocking it. This could be very hard for many business owners especially if the specific product is one that sold very well in the past. If you’re held up on the hope that it will sell again soon, you’re wrong. Chances are, your research and inventory tracking prove that your product should cease being restocked. Having too much of a product that cannot be sold will lose you tons of money. Pay attention to your tracking so that you can determine when to stop stocking unsuccessful products and save your business money.
Saving money through inventory tracking doesn’t have to be difficult. Research the products that your inventory consists of or will consist of. Set an educated goal for your inventory based on that research. Then, establish an inventory turn goal to ensure that you can save the money that would be tied up in your inventory otherwise. Follow the FIFO method to prevent losing money on out-dated products. Last but not least, use your inventory tracking to determine when to stop stocking certain products. Following these easy inventory tracking tips will help you to save money.