Taking Stock: Tips for Good Inventory Management
inNovember 20, 2007 - 3:19pm
Careful inventory management will greatly reduce the chance a customer will leave your Internet shop disappointed. All too frequently customers are told after placing a purchase order for an item, that the item can’t be found, and the goods cannot be delivered. Poor record keeping and bad storage habits are usually the problem. If your records are not accurate and up to date, it may be impossible to know if an item has been sold or is still in inventory; and storing your items willy-nilly will not allow you to quickly find an item, and may result in an item being labeled as “lost” just because you have no idea where you put it. Failing to have a well thought out inventory management system will cost you money and customers.
There is another factor associated with poor storage habits besides simply losing an item: quality assurance. If items are not stored properly damage can occur, either from shuffling the item around, not wrapping it properly, etc. This may result in the item being in a completely different condition than it was when it was first placed in inventory. The consequences of a shop owner not practicing “quality assurance” by examining an item carefully prior to shipping it to a customer is a disappointed buyer and erosion of the buyers confidence in you, your shop and Internet shopping altogether. This is not good for anyone.
For many people it is the physical storage of inventory that is the most difficult to manage efficiently, and a proper and well-managed inventory storage system is a must if one wants happy customers. How you decide to store your physical inventory depends on several factors: the size and location of the storage space available, the type of inventory, and your personal physical limitations. Small items like jewelry items are usually easier to keep track of if stored in containers that offer small, individualized compartments, rather than being packed randomly into large boxes. And, if you are not a physically strong person, it would be foolish to store items 200 pounds at a time in huge boxes that you cannot move without assistance.
When storing items, keep its physical properties and specific needs in mind. Remember that glassware and pottery should not be stored in areas subject to extreme, sudden changes in temperature. Likewise, paper goods have no business being stored in the basement unless you are willing to take Herculean measures to keep the damp space dehumidified. Artwork should not be hung on a wall that receives direct sunlight or placed where it will be exposed to florescent lighting. Use common sense when placing items into storage, the same common sense you would use when choosing which bank to place your money. After all, inventory is simply unconverted cash.
Managing to move everything out from under foot and out of sight, won't automatically mean that you have your inventory under control. If you get everything packaged and stored properly but six months down the road you don’t have a clue where it is, you are no better off than before. Sorting through boxes frantically trying to locate an item a customer has just placed a purchase order for is incredibly frustrating. And the result once again is a disappointed and possibly angry customer. The only way to avoid this scenario is to keep accurate inventory records complete with item id, description, cost and the location of the item.
Having accurate inventory records is also useful should you experience a catastrophic event, such as a fire, theft or other event where you will need to know what you had and how much it was worth to make an insurance claim. Or should something unfortunate happen to you, your family members left to deal with your “stuff” will have an easier time sorting through your inventory and deciding what to sell or keep, etc. should the need arise. If you haven't got a clue where something came from, what you paid for it, where it went, what it is worth or why it might be valuable...it's a pretty safe bet that those who inherit the goods from you won't know either.
A final note: If you think you own something, but cannot find it or, alternatively, if you aren't aware that you still possess an item and so don't bother to list it, in either case that piece of inventory is of no immediate value to you.