Table of Contents
1. Introduction
2. What is Inventory Management System for Small Businesses
3. Why Inventory Management for Small & Medium Businesses (SMBs)
4. Top 8 Advantages of Inventory Management Software for Small Medium Businesses
– Inventory Understocking and Overstocking
– Minimized Returns
– Inventory Replenishment and Forecasting
– Analyzed Inventory Turnover
– Increased Cashflow
– Maximized Savings
– Improved Customer Satisfaction
– Stock Rotation and Inventory Management
5. How to choose the Best Inventory Software for Small and Medium Businesses (SMBs)
Inventory is like blood that flows through your business. Whether it is a small-medium or an enterprise business, the importance of the inventory flow remains critical. However, SMBs are all about what they offer, and inventory is the biggest asset of the entire industry, bringing in all the profit.
SMBs take multiple approaches to having a robust and structured process of complete inventory management. But how would you know that your approach is correct? Or how would you make sure that the structure you decided on fits the needs of your business?
When you manually strategize your approach after investing significant time, the needs may evolve by the time you take action. Let’s understand this better with an example.
For instance, you might identify a particular product as your best seller. However, if a new product launches and quickly surpasses it in sales within a week, you’ll need to reposition that newly popular item closer to the packing station. Managing this process manually can be time-consuming and increases the risk of human error. If done manually, can you analyze, restructure, and restore everything within a week? The answer might be no! Let’s explore this more!
What is an Inventory Management System for Small Businesses?
Inventory management is an essential process of tracking and maintaining the stock of multiple products in a warehouse and online and offline stores and providing smooth fulfillment of orders received by a business or brand.
To achieve accurate information on all selling touchpoints, sellers prioritize adapting technologically backed inventory management solutions to help transform their overall operations. The array of support offered by these solutions not only sorts the complete management process but makes it relatively quick and hassle-free, assisting businesses in maintaining a healthy flow of their stocks and delivering their products to customers on time at the correct costs.
The data collated by an inventory management software or system allows you to check out the pattern of customer purchasing behavior, enabling you to constantly be updated on your in-demand inventory and achieve good sales.
Why Inventory Management for Small Medium Businesses (SMBs)?
The primary benefit of inventory management for small to medium-sized businesses is the ability to streamline inventory flow effectively. Stock availability directly impacts customer satisfaction, and maximizing space utilization is crucial to operational efficiency.
However, managing these elements manually can be challenging. Relying on spreadsheets and reports is prone to human error and lacks the speed and precision needed for optimal performance. An inventory management system eliminates these limitations, reducing errors and accelerating processes for a more reliable and robust inventory system.
To meet the scalability needs of small businesses, inventory management should support seamless integration with POS and ERP systems, providing real-time synchronization across multiple channels—the comprehensive visibility into inventory outflows to optimize overall operations.
Top 8 Advantages of Inventory Management Software for Small Medium Businesses
Inventory management is vital for SMBs and big brands to prevent stockouts, manage stock across multiple sales channels- multiple B2C & B2B marketplaces, websites, and stores, and ensure accurate recordkeeping. A good e-commerce inventory management software system brings about tons of productive outcomes, including but not limited to the following:
1. Inventory Understocking and Overstocking
Both understocking and overstocking can harm your business, impacting costs and customer satisfaction. Effective inventory management ensures a balanced stock, accurately predicting optimal quantities and preventing non-sellable inventory from occupying valuable space.
Excess stock leads to higher handling, storage, and fulfillment costs, while insufficient stock can leave customers dissatisfied. A robust inventory management system uses data on purchase history and product shelf life to guide which items to restock and which to limit.
With streamlined inventory, you enhance profitability and foster a satisfied, loyal customer base that returns for more.
2. Minimized Returns
A significant task of inventory management software is ensuring that returns are processed quickly and correctly to ensure customer satisfaction.
Customers expect easy solutions for returns, and to achieve this, SMBs require a robust system to enable simultaneous updates and revisions on returned inventory and replacements made. Additionally, many small-medium businesses run on the D2C model, which should have a streamlined return process compared to what marketplaces already offer.
A reliable inventory management system swiftly identifies returned or damaged products in your warehouse. It also allows you to restock inventory based on quality, ensuring that only sellable items remain available and keeping the maximized storage intact.
3. Inventory Replenishment and Forecasting
With a good flow of inventory, you require constant inventory updates. Balancing the demand and fulfillment of inventory can accurately be done with the help of the reports and statistics provided by inventory management software based on purchase histories and customer interests. This will allow you to forecast the amount of inventory you should stock.
Once you have the exact data on how much inventory is required, you can restrict both product shortages and leftovers. You will regularly be aware of your most-selling products and never miss a sale in those categories.
4. Analyzed Inventory Turnover
Inventory management software measures your business’s overall inventory turnover and guides you on which goods to focus on.
Inventory turnover analysis helps you understand how fast your goods are being sold according to industry averages and which ones are bringing in the most and least sales.
While high turnover can mean you are right on track or have too little inventory to be sold, slow ones may require strategic attention. An inventory management system gives you complete visibility and real-time sync to target the problem areas and to take up.
5. Increased Cash Flow
Inventory management systems help increase your cash flow by suggesting the exact amount to spend on new inventory with specific data and reports based on your sales trends.
Well-managed inventory will help you determine how much to invest in stocks to ensure a smooth operation.
When you are in control of your budget, you see better cash movements, and you can utilize the money on other points of focus for your business, such as warehouse management operations that include tons of hidden costs off either stocking or handling inventory, managing your taxes, marketing your products, enhancing services, etc.
6. Maximized Savings
The most significant advantage of inventory management software is that it helps you save more while accurately maintaining your overall cash flow.
It is important to identify and adjust slow-moving inventory or items that have been sitting on the shelf for too long because these severely affect profitability.
The right inventory management system will enable real-time allocation of stocks already present in shelf spaces, enabling inventory turns that will increase your total benefits. In addition, you will be able to calculate precisely how much more inventory you require to achieve balanced overall sales.
7. Improved Customer Satisfaction
Updated inventory, managed returns, and prevention of out-of-stock items all provide highly satisfying customer experiences, which are guaranteed to be the deliverables of good inventory management software.
In this day and age, customers have many options while shopping on e-commerce platforms. To be their top choice, maintain a loyal customer base, and keep them returning, you must always have in-stock goods, fast deliveries, faster returns, and customized suggestions to remind your audience to shop for more.
When customers know about the complete cycle of their purchase with real-time updates and consistent delivery fulfilments, they repeat their purchase from you, increasing your credibility and business altogether.
8. Stock Rotation and Inventory Management
Different inventory niches have unique storage requirements, which ensure a smooth and secure inventory flow and prevent issues like pilferage. Effective inventory management for small businesses should facilitate stock rotation tailored to specific categories.
For example, apparel may need to follow a “first in, first out” approach to avoid deterioration. This system allows you to apply various stock rotation techniques, such as FIFO (First In, First Out), LIFO (Last In, First Out), and FEFO (First Expiry, First Out), to align with your product type and storage needs.
Inventory management extends beyond standard stock rotation techniques. For instance, if you manage an organic cosmetic or FMCG brand, your products likely have a shorter shelf life. In addition to FEFO (First Expiry, First Out), you may need a more advanced system.
Smart solutions in the market allow you to set tolerance levels, alerting you when items need to be sold within a specific timeframe to prevent loss and avoid customer dissatisfaction from receiving near-expiry products.
How to choose the best Inventory Software for Small and Medium Businesses (SMBs)
Every business is unique in its requirements and deliverables and has different operational needs. With the right choice of inventory software for your small and medium business, you receive exceptional technology solutions that handle your business’s complete inventory management operations.
1. Features – Look for the features that best suit your stocks’ requirements. And allows you to forecast the right stocks for you.
2. Cost – Operating a warehouse of any model, from standalone to ERP and 3PL, always involves cost. Hence, this can be your second priority, and you should choose what best fits your needs.
3. Team Support – Inventory is dynamic, requiring regular adjustments to maintain optimal flow. Minor challenges often emerge after the inventory setup, highlighting the need for a solution to adapt and support you with timely and effective responses.
You should consider these three essential factors before investing in the right solution for your business.
Precision and efficiency are essential for streamlining operations and driving scalability. The solution your inventory management adapts to plays a crucial role in this growth, as small and medium-sized businesses share the same operational demands as larger enterprises. Investing wisely in the right tools ensures your business is set for success.
Unicommerce: A complete solution package for your Small Medium Businesses (SMBs)
With Unicommerce you receive exceptional technology solutions that handle the complete inventory management operations of your business.
Get updates on online, offline and warehouse inventory operations in real-time. Automated updation of inventory ensures complete visibility of business restricting issues such as stock-outs, dead stocks, duplicate entries, etc.
Tracked immediately and simultaneously in the Uniware app and web version, all the inventory of your business is handled with precision.
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