Losing Money? It Could Be Your Inventory Management

If you have a product, you have inventory. If you have inventory, you are actually spending money. These goods occupy space you may be paying. Moreover, the more they stay with you, the more they can lose their value, which means revenue loss.

But do you know your inventory can hurt you more and worse drain your cash flow? Here's how.

1. Poor Forecasting

Consider just-in-time (JIT) inventory. JIT is not for everyone, especially for those who have poor inventory management skills, since it requires accurate forecasting. Otherwise, you will end up with no product to sell at the right time. Just think about shipment delays, out-of-stock scenarios, and disgruntled customer service. You can potentially say bye-bye to brand reputation.

2. Bad Storage Decisions

The place and the manner in which you store your inventory matter. You may not know it but you are not maximising your warehouse space correctly or spending for space more than you should. If you have items of different sizes and weight, storing them on cantilever racking systems can help you save money. You can adjust them to accommodate different heights or expand them anytime.

3. Wrong Software

You may be using inventory management software, but is it what you need? Is it doing a great service for your business? If it cannot be integrated into your accounting application, if it bogs down more often than not, or if you are having such a difficult time using and understanding it, you are making the wrong investment.

In business, you will win and lose money; that's how it goes. But if you are going to lose it, better do so by spending wisely. One of the important steps you can take is fixing your inventory control and management.