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If you are having a hard time to keep track of your stocks, you are not alone. Many e-commerce businesses, especially big ones had to increase warehouses to keep all the inventories in one place. However, due to the increase in numbers of warehouses, businesses are suffering from a lack of system on maintenance as well as observation to make sure the ins and outs of the product run systematically.
But what is the importance of inventory management systems? How does it help companies to run their businesses without any lag or pause in between? This blog post will dive in further on everything you need to know about it.
Obstacles of the user when facing inventory problem
Knowing how to manage your customers through inventories is a challenge in the business world today. Inventory record faces many problems but these problems can be fixed. Most businesses must already know that inventory management is more complex than it might seem. Below are some of the common challenges or obstacles you might experience:
1. Lack of awareness on your inventory
Being unaware of your inventories or stocks has a negative impact on the supply chains. Businesses and companies should ensure their inventory record is transparent at all times in order to know when stock needs to be restocked. It’s also necessary to consider what’s in stock, what’s on the order list, the order size and quantity, and what products need to be restocked again. This can be a daunting job but maintaining successful business operations is important.
2. The demand from customers
Customers’ demands are constantly changing and with this, retailers have to be more flexible with the orders they receive. Additionally, you have to compete against other companies that are also trying to keep up with customers’ needs and demands. The company is responsible for knowing and recognizing what the consumers demand and assuring that their requirements and desires are met. At the same time, you have to handle the inventory to satisfy your customers’ demand.
3. An increase in competition
There are emerging businesses that have their own warehouse management companies. This causes another challenge for warehouse management firms, growing competition is yet another obstacle for successful inventory management. These emerging markets provide benefits such as lower material costs, labour costs as well as low currency values. Now that with the convenience of international shipping, it is crucial to ensure the supply chain operates efficiently.
4. Lack of insights
Many e-commerce business owners are having a lack of data insights when it comes to inventory management. To make sure that you are fully acknowledged of the latest data insights, you have to keep yourself updated with the current info so that your business can grow even bigger to follow the demand of consumers.
5. Lack of visibility
With the help of inventory management software, you will be able to manage and track the inventory, cash flow, expenses and revenue easily. In order to do this, it depends if the software provides the right tools for you to use.
What is inventory management?
Inventory management is the systematic act or approach of sourcing, storing and selling inventory. In businesses, inventory management is about having the right stock at the right level, right place, at the right time and at the right cost.
Inventory management is a process for you to track and control the inventory of your business as it is being purchased, produced, stored, and used. It governs the entire flow of goods, which includes from buying to selling.
Biztory – Best inventory management system
Save the hassle and use Biztory inventory system. With the stock management cloud system, you can now control your inventory anytime, anywhere! The features include:
Save the hassle and use Biztory inventory system. With the stock management cloud system, you can now control your inventory anytime, anywhere! The features include:
● Sales Report
This report enables you insight on product level sales, with this you can find out product sales as well as potential growing products that help you in your inventory management.
● Product performance report
From the product performance report, you can find out which products are the most hot-selling item. Moreover, you can determine if the pricing on the product is right or not as you can see the gross margin and gross profit based on the report.
● Stock transfer
You can manage your stock between different branches by utilizing the stock transfer function to switch stocks between different branches of your shops or company. With no worries, the system will automatically record the stock amount for you when you’ve made changes.
● Personalized pricing
With personalized pricing function, you can control and remember the individual customer pricing. Different customers in your list will have different individual pricing and you will never lose track.
● Bulk import
You can import and upload your inventory with a provided CSV template. This allows you to import a large number of inventory items in a faster way.
With this system, you will be able to understand and analyze the pricing strategy for your product, do analysis for various types of products and track every detail of your product. Below are why you should totally consider Biztory to manage your stocks:
1. Real-time inventory updates
Unit and price of stocks will be taken in automatically through sales and purchases. You get to save the hassle of updating multiple spreadsheets as inventory will be automatically updated whenever you issue invoice and PO.
2. Monitor your inventory movement with inventory log
Track and trace your inventory changes easily. The system enables you to track your inventory with current stock and available stock to avoid backorder for your customer.
3. Low Stock Notification and Alert (Concern with top- selling product with Low Stock Alert)
The inventory system enables you to keep tabs on your hot selling SKUs and you will never run out of stock again. It will always notify you when the stock level is lower than your minimum.
4. Stay connected with the completed stock report
You can review stock on hand and the value of stock anytime and anywhere. Calculate the stock value by using the weighted average cost method and record it automatically into the balance sheet and COGS.
It is important for a business to understand the products, stocks or inventories they have in store. Implementing effective inventory management helps cut costs and keeps accounts and finances on track. Below are the benefits of inventory management:
1. Better inventory planning
It’s hard to keep track of which products are needed if you don’t have a proper system to take note which products are already stocked. When inventory is not being handled properly, mistakes like overstocking items can possibly happen.
2. Accurate record in the inventory data
There are times when customers placed an order online but the product they wanted to buy is no longer in stock. This is due to the inaccurate inventory record by online stores or retailers. If the products are not recorded properly, issues like sending the customer the wrong item or cancelled order are likely to occur.
3. Better experience for the customers
Every business wants to give the best shopping experience for their consumers. With a proper inventory management system, you will be able to attract loyal customers effortlessly. Your business will also be able to gain more orders as the orders are processed efficiently and quickly to the customers.
New inventory feature – Weighted Average Cost
By having Biztory inventory management system, you also get to enjoy the latest feature – Weighted Average Cost. With this new feature, you don’t have to trouble yourself to calculate the stock value. The system is formulated to generate the stock value and record it into COGS and your inventory automatically.
The weighted average cost is one of the methods used to calculate the amount of inventory that goes into the cost of sold goods (COGS) and inventory. This weighted average approach is used when the inventory products are complicated that assigning a particular cost to an individual product becomes difficult.
With weighted average cost, you can ensure the accuracy of your latest stock. As an example, you may pay different prices due to the types of inventory stock or same stock items at different times. By using WAC, you can calculate the average price for the cost of inventory and record it down into COGS and inventory.
Scenario:
Melinda bought ITEM A on 1st May 2020 and 2nd May 2020. The price has varied between these two days.
1st May 2020 – RM1
2nd May 2020 – RM2
Conclusion
When it comes to inventory management, there you have to consider as it will give a big impact on your business. Using an inventory management software will reduce your inventory management errors, making your business run more efficient, attracting more customers and getting more profits.
An inventory management system is essential in order to create a successful brand and company. Biztory inventory management system can definitely implement the best e-commerce distribution and logistics strategies for your business by optimizing inventory management processes across different online retail brands and stores.
Here at Biztory, we provide a structured and rigorous inventory management system for your business to utilize so you don’t have to face another inventory problem anymore!