Managing inventory is an important part of managing a business, yet sometimes it's a task that's given too little consideration by budding entrepreneurs. Especially in the case of new businesses, inventory will often account for the largest part of the company's startup investment and, as such, needs to be positioned to be properly established, organized and tended to.
Of course, not all inventory is created equal. Neither does all inventory require the same considerations for its maintenance. If you're breaking into a new business, or seeking to add new items to your product offerings, be sure you fully evaluate the needs of your inventory, and whether it will require any special management or handling. You'll need to consider an item's size, value, fragility and even shelf life as part of your work in acquiring, maintaining, and selling your goods.
With that, take a look at this list of key considerations as you determine if your inventory will require any special care and handling.
How big (or small) are the items that you'll have in inventory? If you're selling furniture or other large items, you'll need to ensure you'll have adequate storage space, including enough space to safely access, unload and restock it. On the other hand, if you'll be selling smaller items, they'll need to be properly stored in a way that they, too, can be easily accessed while avoiding loss or damage to small components.
Some items need special care in regard to humidity and exposure to sunlight
Keep it cool
Do your items require climate control to avoid damage? Most inventory items are best stored in clean, dry environments, but some items need special care in regard to humidity and exposure to sunlight, such as printed matter and textiles.
Ensure it's the real deal
Does your inventory require professional assessment and reliable authentication? If you're dealing in truly rare and collectible items, you might find your customers wanting proof of originality before they'll make a purchase.
Authentication can cost extra, and is a cost you'll need to figure into the overall cost of your inventory. You'll need to ensure your eventual profit will cover your outlay of the items themselves, as well as any professional assessment fees.
Keep it safe
Does your inventory need to be secured? If you store your inventory at a business location or some sort of off-site storage facility, you'll want to be certain it is properly locked up and access is restricted to yourself and anyone else you authorize to access it.
If you manage your inventory out of your home, it's probably not necessary to be concerned about its access by friends or family. Then again, you will want to be able to close up your inventory area to ensure nothing is inadvertently moved or misplaced. And, of course, truly valuable items such as jewelry and the like should be locked up for safety's sake, no matter where you store them.
Protect your inventory investment
Should your inventory be insured? Don't overlook this key protection to your goods and to your business. While you're establishing your business organization—by way of a business license or incorporation—remember to address the matter of business insurance that extends to cover your inventory. If the worst should happen and your inventory is damaged, destroyed, or stolen, you'll want to be sure you're able to recover any loss and replace your inventory to keep your business running.
It's important to keep inventory expansion in mind and be prepared to deal with overflow
Think about growth
How large will your inventory stores grow, and did you plan for that when you first considered the inventory you'd manage? While you might start your business venture with only modest expectations of inventory turnover and replenishment, many sellers have found their businesses have grown—including their inventory—faster than anticipated.
When a business finds its rhythm, and is on "the grow," inventory storage facilities are often quickly outgrown. For this reason, it's important to keep inventory expansion in mind and be prepared to deal with overflow from your initial inventory management and storage approach.
Consider the costs of keeping your inventory
As you've likely anticipated by now, each inventory situation can present a cost factor to a business. Whether the inventory is large, small, delicate or temperature sensitive, the specific storage needs will likely require some investment—one-time or recurring—to properly maintain the stock. And plan for potential increases to these costs in the (happy) eventuality that the inventory will increase as the business grows.
You've got the inventory, but can you get to it?
It's often a good sign to see the inventory in your stockroom grow in quantity, filling shelves deep and high. But when it comes time to access that inventory—to fulfill orders, to rotate in new backfill stock, or to take periodic counts—can you effectively access your goods? Yes, this is the best item, saved for last: When you establish your inventory plan, including what you'll inventory and how you'll store it, you need to ensure you have an effective and efficient access plan.
To ensure your inventory is top quality, always ready to sell and ship, and easy to recount, you'll need to ensure you've established a storage approach that makes it easy to get your hands on the goods. This is true for any inventory situation, large or small. Whether your items are kept in a warehouse facility, or nestled in an in-home cubby, be sure to keep the goods within easy reach. Plan for efficiency up front, and you'll save countless time and money for the effort.
While a steady supply of hot-selling inventory is always the goal for both new and established sellers, be sure to give careful consideration to your inventory situation. Create a plan before you invest in any inventory to ensure it will serve your business goals by ensuring your inventory is safe, secure and easy to ship.