The Basics of Inventory Management

Learning how to manage inventory is crucial to any business, especially those that are selling products. On the surface, it may seem as simple as counting the products on hand and making lists. But really, it’s much more complicated than that. 

What is inventory management?

Inventory management means accounting for the products in your warehouse or storeroom, including the raw materials and other supplies – basically everything that keeps your business running. 

Why is it important?

To keep your business afloat, you need to be able to manage all the good properly. This way, you can keep track of what’s available, what’s needed, and what’s about to expire, and what products are outdated. It will also help you avoid overspending and overstocking items. 

Kinds of Inventory

1. Raw Materials – the ones that you use to make the products you sell. If you’re in the business of selling candles, the raw materials would be the wax, the wicks, the fragrance oils, the jars, and whatever else you put in there. Raw materials must be stored carefully as some of them may be sensitive to the temperature.
2. Unfinished Products – these are the works in progress. Using the first example, the unfinished products in that case would be the candles that are in the curing period.
3. Finished Products – the goods can be sold directly to another business or consumer. These are the products you can display in your physical stores or list for sale on your website.
4. Maintenance, Repair, and Operating (MRO) Supplies – these are all the materials needed to keep your warehouse or storeroom running smoothly.
5. Buffer Inventory – also called the “safety stock,” these are goods that serve as cushions in case of an unexpected issue

How to Manage Your Inventory

Here are some essential tips to effectively manage your inventory:

1. Track all product information.
2. Manage vendor and supplier relationships.
3. Audit your inventory.
4. Practice the 80/20 rule. 80% of your profits come from 20% of your stock.
5. Be consistent.
6. Track your sales.
7. Order restocks yourself.
8. Invest in an inventory management technology.

Expand Your Technological Horizons

If you’re ready to take your inventory management to the next level, it’s time to invest in inventory management technology!

Clixon integrates all the moving parts involved in supply purchasing and inventory management into one affordable and easy-to-use platform. It puts direct access to a custom catalog, all your vendors, and every step of the ordering process at your fingertips, giving your team more time to focus on patient care and growing your business. Plus, with detailed reports and analytics keeping you on top of your inventory, buying habits, production, and budget, it facilitates well-informed decisions that can save your business time and money.