{"id":2782,"date":"2022-06-09T15:30:20","date_gmt":"2022-06-09T19:30:20","guid":{"rendered":"https:\/\/www.skypointfcu.com\/wph\/workarea\/?p=2782"},"modified":"2022-06-09T15:30:38","modified_gmt":"2022-06-09T19:30:38","slug":"5-ways-to-control-your-inventory-so-it-doesnt-control-you","status":"publish","type":"post","link":"https:\/\/www.skypointfcu.com\/wph\/workarea\/blog\/5-ways-to-control-your-inventory-so-it-doesnt-control-you\/","title":{"rendered":"5 Ways to Control Your Inventory So It Doesn\u2019t Control You"},"content":{"rendered":"\n

Managing inventory is a task that can make or break your small business. With too much inventory, profits suffer and storerooms overflow. With too little, items get back-ordered, customers get frustrated and business is lost. And striking a balance is hard, especially with disruptions to the global supply chain<\/a> in the last few years causing delayed deliveries.<\/p>\n\n\n\n

While you can\u2019t control the supply chain, you can take steps to prevent common problems like product shortages and excess stock. Here\u2019s how.<\/p>\n\n\n\n

1. Stick to the story<\/strong><\/p>\n\n\n\n

Donna Daniel owns and operates three connected small businesses in Claremont, California: The Grove Clothing, The Grove Home and The Outdoor Store, which sell women\u2019s clothing, home goods and unisex adventure-themed gear, respectively. To run all three of her stores, Daniel needs to keep an impressive variety and quantity of inventory in stock \u2014 and ensure it moves quickly to make room for seasonal items and new shipments.<\/p>\n\n\n\n

To keep her inventory cohesive within each store, she arranges it in themed displays \u2014 or what she calls \u201cstories\u201d \u2014 which tie together dozens of different items to appeal to a color, season or activity.<\/p>\n\n\n\n

\u201cI don\u2019t buy anything outside of the stories,\u201d she says, which helps her collect data on sales and seasonal trends, and keeps her stock to what\u2019s most likely to sell.<\/p>\n\n\n\n

She keeps most of her inventory on the shop floor, with stock in each store\u2019s backroom and larger items in a nearby storage unit. In the backrooms and warehouse, she stores items according to product type and size \u2014 not by story \u2014 so employees can easily restock displays and substitute a similar item if necessary.<\/p>\n\n\n\n

2. Double down on your reliable inventory<\/strong><\/p>\n\n\n\n

\u201cJust-in-time inventory is much more difficult to do today,\u201d says Mark Baxa, president and CEO of the Council of Supply Chain Management Professionals, a global trade association for supply chain professionals. Baxa adds that since the supply chain is less stable than it was pre-pandemic, businesses may need to lean on their most reliable products and vendors.<\/p>\n\n\n\n

Courtney Cowan, owner and founder of Los Angeles bakery Milk Jar Cookies, keeps supply needs and consumer demand stable with a very consistent product line. Her 16-flavor menu has \u201cchanged very little\u201d in the bakery\u2019s nine-year history, though she leaves room for a rare seasonal standout to join the rotation. Since her store pre-mixes and preserves dough in a deep freezer, she can ensure that her bestsellers are always in stock.<\/p>\n\n\n\n

Though some businesses may prefer a bit more variety, in uncertain times \u2014 over-ordering on go-to products with a dependable profit margin can help fill the gaps and keep sales steady.<\/p>\n\n\n\n

3. Keep products moving<\/strong><\/p>\n\n\n\n

Longtime retailers know that while running out of inventory is bad, having too much can be worse. \u201cToo much backstock eats up all your capital,\u201d Daniel says. She prevents this from happening by planning ahead and using sales sections to make room for new merchandise.<\/p>\n\n\n\n

Daniel reorders seasonal inventory as far as a year ahead by using recent sales reports as a baseline. But with this commitment to hundreds of new products arriving every month, she makes sure that items don\u2019t sit on shelves for more than a few weeks.<\/p>\n\n\n\n

\u201cI do not like merchandise hanging around,\u201d she says, explaining that if an item isn\u2019t clearing out quickly enough, she\u2019ll move it to the sales rack and discount it until it\u2019s gone.<\/p>\n\n\n\n

Though selling an item for a fraction of its original price may seem painful, it may be worth doing to keep inventory moving and keep customers coming back for new products.<\/p>\n\n\n\n

4. Get to know your supply chain<\/strong><\/p>\n\n\n\n

Especially in periods of supply chain disruption, getting to know your vendors<\/a> can make a big difference in your day-to-day operations. \u201cHold your supplier base accountable,\u201d Baxa says. He suggests finding the \u201cshortest path\u201d possible, including finding local and sustainable suppliers, to help ensure consistent, reliable supply.<\/p>\n\n\n\n

Daniel follows the same principle, sourcing her inventory from mostly local vendors so she can pick up items instead of shipping. She weighs several factors, including production time, available quantity and shelf life to figure out how much to order and how often.<\/p>\n\n\n\n

Cowan\u2019s inventory is perishable, so she needs her wholesale ingredients to arrive on a tight schedule. Her bakery receives truck deliveries directly from the restaurant supplier Sysco and wholesale store Costco, which keeps her supply chain close to home.<\/p>\n\n\n\n

\u201cWe keep it as centralized as possible,\u201d Cowan says. For special ingredients like nuts and candy, she places advance orders with small online vendors.<\/p>\n\n\n\n

Clear communication with vendors can help business owners figure out limitations, plan ahead and mitigate risk.<\/p>\n\n\n\n

5. Use a point-of-sale system with inventory management tools<\/strong><\/p>\n\n\n\n

For the past five years, Daniel has been using Lightspeed, a POS system<\/a> with standout inventory management tools. The software can track her inventory across all three of her stores, and it generates reports that help her analyze seasonal sales data and follow her businesses\u2019 growth.<\/p>\n\n\n\n

This data is essential for her to plan reorder points and determine which items will reliably sell. Especially with a small staff and multiple locations, an all-in-one POS system can help minimize costs and labor.<\/p>\n\n\n\n

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