Now that you’ve discovered your low-cost, low-risk business idea, it’s time to figure out how to manage it. While creating an inventory storage system for your small business might seem daunting, strategic organization, intuitive apps, and helpful insight from other entrepreneurs can help you find a system that works!
How to Manage Inventory
So what is inventory management? It’s a way to save money by having your most in-demand products right where you need them and everything else easy to find and package. When you’re just starting out, it might seem silly to think about inventory. But what starts as a small idea can grow quickly and unexpectedly. Because quick order fulfillment is crucial for keeping customers happy, beginning with a simple inventory system for your small business could be the key to success.
Apply the 80/20 Rule
The 80/20 rule, also known as the Pareto Principle, can be applied to managing inventory. Essentially, it means 80% of revenue comes from 20% of your product line. That is, certain things will sell more frequently than others. Having these items nearby can help you efficiently fill orders and keep an eye on product supply. Stacie Lucas, founder of Amae Co., a sustainable women and children’s clothing company, says trial-and-error is key to finding these “aha” moments about what to keep in stock. Lucas encourages new business owners to be flexible and use strategies that work well for their personality.
The beginning of a new business is the perfect opportunity to watch sales closely and identify trends in buying and seasonality. There are many strategies on how to manage inventory and monitor top-selling items. This could be as simple as putting a sticker on the shelves next to fast moving items. Keeping a close eye on bestsellers can also help focus your priorities and prevent you from tying up all of your capitol in inventory that’s not moving.
Accurate Inventory Tracking
Gaining the trust of customers is crucial to building your brand. One of the quickest ways to lose trust is to provide customers with inaccurate information about what’s available and what’s out of stock. It’s easy to make mistakes in the e-commerce world, especially if your products are housed in multiple locations. Fortunately, inventory management software—particularly those with bar code scanning capabilities—can help you keep a handle on what you have. This software makes your processes more efficient, but nothing can replace cycle counting and quality checking your inventory on a regular basis, as well as doing a physical inventory annually.
Take Time For Quality Control
The best inventory tracking in the world is worthless if you’re not getting the correct, quality products to customers in a timely-fashion. When it comes to Amae Co., Stacie Lucas and her husband pre-package and quality control 100% of products before they’re even listed. Even though most consumers are used to instant “Amazon shipping,” Lucas says jumping the gun and rushing inventory out into the world without solid preparations usually leads to a lot of stressful moments.
“We live in a world where the expectation of receiving something fast is getting greater and greater, so do everything you can on the front end of packaging and inventory,” Lucas said. “So when a sale comes through, you’re prepped to box and ship. We aren’t perfect at this ourselves yet, but it’s what we strive for.”
Organize Your Inventory
Now that you have an idea about the quantity and kinds of products to stock, it’s important to decide how to store them to maximize efficiency. Having a streamlined organization system in place will keep customers happy and provide you with peace of mind.
Smart organization doesn’t have to cost a fortune! Storing ribbons, cards, or hats? Build your own inventory storage bins out of cardboard boxes, or repurpose old bookshelves to store items that don’t need to be fully covered. Old dressers can be used to store fabrics or children’s clothing. Basic boxes can even be transformed by adding photos to the outside. If you sell jewelry or other tiny items, 3-ring binders and zip top bags are all it takes for easy-to-use organization. Once you’ve found a place to store your products, consider labeling and alphabetizing items to make finding what you need a breeze.
Inventory Organization Products
When you’re just getting started, no penny can be wasted. While a lot of organizational supplies can be made yourself, there are many low-cost options that can help with your initial setup. Plastic storage bins and affordable shelving can be found at almost any hardware store. More specialized items like a steel shelf that holds up to 4,000 pounds can be found online. Supplies geared toward smaller products, like clear plastic organizers, can be found at craft stores. If it’s in the budget to get a free-standing bin rack, there are also many options there for customization.
For Stacie Lucas, having a mix of practical and attractive inventory storage products is an important balance. “We use a lot of industrial organizational systems from ULINE in our home office, which stores the not so pretty side of our business needs,” Lucas said. “For our visible storage spaces, we really wanted functional storage that was pleasing to the eye and kept our space inspiring to be in.”
Where to Store Your Inventory
The best system is ultimately the one that works for you. Make decisions on where to keep items based on what’s important for quick product fulfillment, as well as your own creative process.
At-Home & Office Organization
The frequency at which you’re packaging and shipping bestsellers can be cause for keeping some inventory in your home. Stacie Lucas greatly values having a separate space to create in. However, the importance of quick shipping and quality control is why Lucas and her husband have converted their home office closet into an inventory sorter with over 100 bins.
“Shipping is really our only connection to the customer,” Lucas said. “So with that, it’s important that they feel valued through this process. If we maintain control over shipping, we’re able to take 100% responsibility for mistakes made.”
Rent a Storage Unit
Even with the best planning, the sheer size of your products or volume of sales will cause you to run out of space eventually. Renting a storefront or warehouse space can be pricey, especially when you’re just starting out. That’s where storage units come in. Offering more room for small business inventory at an affordable price, you can keep expanding without inventory overtaking your entire home.
Benefits for Every Business
When it comes to starting out, your priorities will be shifting from week to week. Finding a flexible storage solution that meets your creative needs will help you do your best work.
More Room to Create
Having a hard time feeling inspired in your cluttered workspace? Storing things at home might be a convenient option, but sometimes your best work is done in a separate space. If you’re low on inspiration, renting a storage unit to store items could free up more space to create. When it comes to feeling inspired, Stacie Lucas utilizes a separate workspace to do her best work. The mother of two believes keeping her work and family life separate helps her stay focused and invested.
“The creative process does not function optimally when constantly interrupted,” Lucas said. “Plus, I’m able to keep my studio a place that’s inspiring—from the decor and being able to play music without waking anyone to being free to make big messes and wait to clean until the project is over.”
Grow at Your Pace
Not only will a separate location provide more opportunities for inventory storage solutions, but with Extra Space Storage, you also have the benefit of not signing a lease. Rent your space month-to-month so you can easily grow with your needs.
Extra Space Storage facilities offer many amenities perfect for inventory storage. Whether you’re looking for a facility that accepts deliveries, features on-site printing, or has first-floor access, you can get exactly what your business needs with a storage unit.
Protecting your products from the elements is crucial for conserving assets and not wasting money. A basement or garage could seem like the cheapest alternative to space issues, but heat, humidity, and cold can put your products at risk. If your business is not large enough to support a warehouse or storefront, climate-controlled storage could be your safest and most budget-friendly option.
In the vintage furniture market? Your storage unit could double as a showroom with the security of not having people come to your actual home. Drive-up access allows you to quickly enter your storage unit and easily load supplies.
Extended or 24-Hour Access
We know a new business doesn’t always work on a set schedule. With extended hours of operation and the option for 24/7-access, you can fit trips to your storage unit in when you have time.
Rest easy knowing your supplies are safe with enhanced security features like 24/7 video surveillance, electronic gate access, and on-site managers.
Inventory Management Software
The bigger your business grows, the more managing inventory might overwhelm you. Spreadsheets can help you get a handle on what you have, but they don’t update in real time, so they can quickly become outdated. Save yourself time and ensure accuracy when you use easily integrated inventory management software. There are unlimited free and low-cost systems available, so it’s not difficult to find software tailored to your specific needs. Evaluate how many users need to access the software, the volume and type of inventory you deal with, your budget, and integration needs to help narrow your search.
Many free inventory management systems can successfully support a small business. Even if you think you can handle tracking on your own, setting up a system now can help you stay organized and enhance future growth. Plus, these options are free so it doesn’t hurt to give a couple a try!
This free version of Almyta Control System is ideal if you’re a solo entrepreneur or working on a small team. The software is really only intended to be downloaded on one computer, as data will not sync across multiple workstations. A huge perk of ABC Inventory being hosted on one’s own computer is that it’s highly customizable and can keep track of an unlimited number of warehouses and products.
Looking for free, cloud-based inventory management and order fulfillment? Delivrd could be a great option for your small business. The free plan only covers one location and 25 stock keeping units but offers easy integration with Shopify and WooCommerce, barcode scanning, and some financial reporting tools. Delivrd is unique in that its free version also provides email support to users, which is relatively rare for a free inventory management system. If your business grows, you can upgrade to the $49 a month plan, which offers unlimited warehouse locations and products.
If you need a product to fulfill multiple needs with one system, Ordoro could be a great option for you. From shipping to inventory management, this software integrates with eBay, Etsy, and countless other platforms. The free version is available to one user and can service up to 50 orders per month. Ordoro also features three basic software upgrades that are reasonably priced and four more expensive pro software upgrades, meaning no matter how big your business gets, it can continue to be serviced by Ordoro.
Spending a little money on inventory management software could unlock more helpful features and enhanced product support. If you’re expanding or have it in the budget, these low-cost options could make your life a lot easier and more organized!
If you already have a point-of-sale system you love, an inventory management app could be a cost-effective solution for your business. Inventory Now Lite can easily integrate with your current system on your iPhone or iPad and features bar code scanning capabilities. This system doesn’t look fancy, but it’s easy to use and only $2.99 for basic app features, such as sorting and searching inventory. Another positive feature is that data can be easily exported to spreadsheets and backed up on outside software.
It may be difficult to predict inventory trends on your own. That’s why On Shelf not only tracks inventory, but helps you maximize profits as well. This iPhone or iPad app is only $4.99 with an additional fee for cloud storage. It helps you forecast what you need to keep on the shelf and which products are keeping your funds tied up. If you were only using spreadsheets to manage inventory before, they can be easily imported into the app. Customer-specific tracking, bar code scanning, and multi-user capabilities all make this inventory management app worth the money.
If you also need software to process payments, Square offers inventory management that directly connects to your point of sale. While price varies based on need, Square’s ability to bundle product features makes it easy and affordable to get exactly what you want without paying for things you don’t. This cloud-based management software processes sales in real time, so you know exactly what you have and what’s running low. Square’s user-friendly design is also easy to use if your business moves around a lot, thanks to a fully integrated app for phones and tablets.
At the end of the day, you know what works best for your business. Take the time to research and try out different inventory management apps, software, and organizational planning tips. Doing this research early on will save yourself from a major headache down the the road and help you make the most of storing inventory from the the start!