It is crucial for any business to keep track of their inventory, update the data and track profits, needs and sales. Especially for a small and medium business (SME), losing the ability to keep up with sales and demand will punish you a lot, which give SME no chance to recover. That’s the reason why it is necessary to know about SME Inventory Management. So let’s dive in The Ultimate Guide of Inventory Management system for SMEs in Magestore Blog.
Whether you manage inventory for your own warehouses, or track sales and assets across multiple retailer platforms like Amazon or eBay, inventory management helps you to track and control your supply, so that you can optimize your inventory and manage stock without mistakes. While inventory control software can seem enormous at first, you can get used to it easily, especially if you start early.
What is Inventory Management system?
Investopedia refers Inventory Management as a process of ordering, storing and using a company’s inventory: raw materials, components and finished products. We define Inventory Management is a component of supply chain management that oversees the flow of items (products, goods, etc) as they move from the manufacturer to the warehouse and then to the point of sale.
Then, Inventory Management system tracks goods through the above Inventory Management process. And a good Inventory management system must help SME do all the difficult math. Inventory management helps you track sales, shipments, and stock, so you can see which products are selling, and in what quantity. You also know where is your stock, and even forecast the supply.
Why an SME needs an Inventory Management system?
First of all, you need to know that there are two typical ways to manage SME’s inventory, range from Excel spreadsheets to a well-built Inventory management software, with each typical pros, cons and use.
Excel Spreadsheets – Low cost SME’s Inventory Management system
If you don’t have the budget for a dedicated inventory management software, then Excel spreadsheet could be a solution for SME’s early stage. Though the reduction of cost is quite cheaper (ranging from Free using Google Spreadsheets or up to $12.5/user/month with Microsoft Office 365 Business), you must take a lot of efforts into tracking and analyzing your inventory just like you would with a software program. In fact, Excel Inventory Management can become a lot more complicated, even with small businesses, when you forget to update or control the stock regularly, or when you have too many products. All things must do manually, without the help of barcode scanner or POS system integration.
However, if an SME business doesn’t care about human error, or have limited number of products and sales channels, with the available time and simply no cost worry, they can use the built in formulas to organize and order the number in Excel. Creating running inventory totals, and sales data based on the period is also possible, so long as your Excel inputs are correct.
Inventory Management Software for SME business
Dedicated inventory management software like Magento ERP of Magestore will get SME business over obstacles created by manual Excel Inventory. Essentially, even if you are a fan of Excel, you can easily import or export to a .CSV or .XLSX file. With it, you can wipe out problems like manual errors or sorting through backorders.
Note: You can check these tips to implement backorder in Magento efficiently.
According to SBA (Small Business Administration – an US government agency that provides support to entrepreneurs and small businesses), poor inventory management is the 4th BIGGEST killer of SMEs. And the statistics told the truth, 56% of small businesses end after 4 years with 90% of the cases be the mistakes from manual spreadsheets.
Here are the few benefits of using Magestore Inventory Management system – Magento ERP:
- Improve Inventory Visibility.
- Better Security by layered permission.
- Ensure a smooth and on-time order fulfillment.
- Seamless multichannel shopping experience.
- Reduce paperwork in accurate automated process.
- Save time, effort and operational costs.
- Insightful and more correct planning.
SMEs Inventory Management must-have features (INFOGRAPHIC)
Basic features for SME Inventory Management software:
- Basic Inventory Control
- Barcoding and Scanning
- Demand Forecasting
Advanced features for SME Inventory Management would be:
1, Barcode Support
As your business and inventory grow, barcode management will be a great help by saving your time in finding products and reducing human errors, therefore boosting workflow efficiency.
2, Supplier and Purchase Management
Procurement is an important part to ensure you always have enough stock on hand for sales.
3, POS Integration
For business having both online and offline stores, quick integration between inventory and point-of-sale is vital, as you always want to know the latest stock status to sell and re-stock in time.
4, Inventory Report
With reports, you can make the better decisions and save more cost, knowing which location drives the highest sales, how much inventory you need, which warehouse is performing well.
And here is the infographic:
This is the last thing you need to know about SME Inventory Management, if you find out something interesting, please don’t hesitate and share with us. Thank you!