From excess inventory to a high number of stock-outs, lack of information around inventory can have a serious impact on your retail operation. Whether you’re selling via e-commerce marketplaces or a brick-and-mortar storefront, monitoring inventory across different channels can be challenging. Using manual methods like spreadsheets won’t give you a comprehensive view of your operation. Instead, retail inventory management software that’s integrated with your point of sale system, online sales channels, and warehousing can support, track, and automate a crucial part of your business.
From planning to execution, inventory accuracy and up-to-the-minute data plays an important role in replenishment, allocation, and fulfillment for a small business. Failure to take control of inventory management can lead to consequences like inventory shrinkage, ineffective planning, and poor customer service.
What does that mean in real terms? It’s inventory sitting at the back of a warehouse becoming obsolete, because no one realizes it’s there. It’s your employees thinking you have more stock than you do, leading to massive customer dissatisfaction when they receive that dreaded “sorry, your product is no longer available” email. It’s countless hours of labor for your staff to work out where the inaccuracies are and how they can be fixed.
There’s also a financial impact. Inventory management software can help retailers track inventory levels, orders, sales and deliveries in one unified location, even when selling on multiple e-commerce platforms. It ensures retailers place the right products on the right shelves at the right time. Inventory management also helps to reduce occurrences of inventory write-offs and stock-outs, boosting revenue in the process. Savings can be substantial. Every year, overstocks and out-of-stocks cost U.S. retailers $123.4 billion and $129.5 billion, respectively.
Simple inventory management software can provide substantial benefits, not just for your business, but for your customers too.
Providing your business with the ability to track inventory levels, retail inventory management software allows you to more accurately plan the replenishment and allocation of your current in-stock items. This enables small and medium-sized businesses to achieve a high in-stock percentage and turnover, lowering your risk of stock-outs. In addition, increased visibility helps retailers quickly fulfill customer orders and reduces shrinkage through FIFO (first in, first out) methods of managing inventory.
One of the most significant features of inventory management software for small business is the ability to track inventory quickly and cost-effectively through item-level tagging (RFID). This helps retailers determine how much inventory is on the floor, what categories (sizes and colors) need to be restocked, and how much inventory is available in the stock rooms. Rather than manually sorting piles of products, workers can efficiently scan RFID tags. When customer returns are processed, new sales tags can be quickly assigned, and the product can be put back into inventory for sale or on shelves within hours. Generally, implementing RFID can reduce the amount of clearance items due to incorrect inventory and excess ordering, save time and labor, and increase inventory accuracy.
Inventory management software can also help retailers set up product variations, reducing the risk of build ups of excess inventory resulting in clearance sales at the end of season. It can also alert you to customer purchasing trends and help with demand shaping. Product variations based on analytics and market research can help to optimize inventory investment. This enables retailers to focus their efforts on high-performing SKUs (stock keeping units), allowing them to achieve a better return on investment.
While inventory management software has clear benefits for the customer-facing part of your operation, it can also help you manage the core, back-office functions of your business.
Some inventory management software is specifically designed to integrate with accounting tools like QuickBooks, and can automate the quoting, ordering and purchasing processes. Others highlight drop-shipping management, and feature cloud-based tools that make it easy to send goods directly to the customer from the manufacturer. Some inventory management software can even assist in areas like currency conversions, and can save you steps by automatically converting orders into your home currency using real-time exchange rates.
Finally, simple inventory management software can provide extensive benefits to the customer. With improved order fulfillment and a reduced chance that customers will need to return products due to incorrect SKUs, inventory management allows you to build better, long-lasting relationships with your customers. Having the right products at the right time helps you cater specifically to needs of your customers.
Logistics providers can help you find inventory management software solutions and inventory tracking applications that integrate with your business system. For example, UPS Ready® Program providers help small and medium-sized businesses secure the benefits of inventory management software and simplify shipping processes. These approved UPS providers have UPS technology integrated in their inventory management software solutions and business applications, which can make your business more efficient by streamlining the processes of shipping orders and returns. To properly match a solution to a specific inventory challenge, it’s important to conduct a mutual discovery session between your business and the provider in question. Some of the following UPS Ready Providers offer inventory management software and integrated UPS shipping that may be beneficial for small and medium-sized businesses:
For operational efficiency, customer satisfaction, and your bottom line, retail inventory management software can be crucial. With inventory management software, businesses can reduce the time and effort put into basic inventory tracking, and instead focus on improving their business model and products. Find out more about compatible inventory management software for your system, with the help of the UPS Ready Program.
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