If you're like the average entrepreneur, you're trying to juggle 25 balls at once. The result, all too frequently, is that you may mismanage your inventory. You buy too much or too little. You stop keeping track of what you have. You fail to gauge the short life span of fad or seasonal items - and are unable to sell unused inventory rapidly when demand declines. Stop for a moment and get your inventory under control. Here's how.
Restrict access to your inventory. Inventory is money. Limit the number of people who have access to inventory items. Pilferage can cut deeply into your profits.
Frequently check the inventory against your records. Make frequent spot checks. You will not only be able to troubleshoot, but also avoid the ordeal of doing an annual audit of your entire inventory.
Segment your inventory. Concentrate on your fast movers, and reduce the quantity of your slow ones. Develop a deeper inventory of your more actively sold items. Assess whether the profits you gain from your slow movers justify the amount of money tied up to keep them in stock.
Work with your suppliers to trim your inventory and improve its quality. Ask your key suppliers about cost-cutting graces that will allow you to maintain a smaller inventory without sacrificing service to your customers (i.e., shorter order lead times or waiver of certain surcharges).
Measure your inventory performance. Scrutinize how well your inventory performs. Review your inventory investment, as represented by its cash value. Assess your inventory service, as measured by the number of times requested items are out of stock. Lastly, evaluate inventory efficiency, based on the number of items you can ship on the date requested.