RASP: is the internal color code for Raspberry.201: ties to the last four digits of the supplier’s UPC to cross-check reorders and stock receipts.3: is the internal material code for plastic to direct display, handling and packing.066: is the internal category code for a dinner plate.BW: is the internal supplier code for the supplier BentleyWare.SKUs generally use a combination of letters and numbers which are arranged to deliver key details about an item at a glance.įor example, BW066-3201_RASP is an internal SKU that’s coded to communicate specific information for a home goods company. Create an Internal SKU SystemĬreating an internal product SKU system is helpful for quickly identifying and tracking products during daily activities. Plus, most seamlessly connect to retail point-of-sale (POS) systems, online sales channels, fulfillment centers and dropship partners for real-time inventory updates. These systems streamline customer orders, inventory tracking, supplier data, purchase orders and stock receipts within one system. However, integrated inventory management systems such as Square POS, Lightspeed or Clover are very cost-effective and make handling small business inventory a snap from day one. You can use a spreadsheet for simple inventory tracking needs, say for less than 100 items. Retail pricing: current and promotional sale prices for goods.Product costs: wholesale costs per supplier and quantity discounts.Supplier information: contact information, order minimums, case quantities and delivery times-called lead times.Product storage location: assigned areas where items are stored or displayed.Quantities on hand (QOH): the current amount of stock per item in your shop or facility.Internal and supplier product numbers: product numbers are called stock keeping units (SKUs) and many suppliers also use universal product codes (UPCs).The inventory data you’ll want to record and track generally includes: Square POS is a free system with a full suite of inventory tools that help you track all types of product data. For this, spreadsheets and inventory management systems are invaluable tools. Whether you stock goods yourself, use a fulfillment partner or focus on dropship vendors, keeping close tabs on inventory data is vital to inventory management. However, if you store goods externally in fulfillment centers or supplier warehouses, or if you use dropship suppliers, you need to tie inventory processes and data tools to their systems. If you stock all products in your own facility, your inventory controls and processes are handled internally. How you source and store the various products you sell determines how you manage your inventory. Define Product Sourcing and Storage Methods Here’s a seven-step approach to creating an inventory management plan with procedures, controls and tools tailored to your business’s unique needs. Once you have good processes and procedures in place, you’ll soon find more time for business-building activities. Good inventory management is more than increasing stock accuracy, it makes your day more efficient. If you find that inventory-related tasks take up a major portion of each day, it’s probably time for a review and reboot. Luckily, you can avoid these roadblocks by incorporating simple inventory management procedures and tools into your operating plan. Too much unsold inventory on hand at the end of the year equals higher business property tax and income tax bills. Over time, inventory overages also lead to bottom-line losses due to expired, outdated and otherwise unsellable stock.Īnd let’s not forget business taxes. It’s very easy to order excess inventory when you don’t closely track stock, which leaves you cash-strapped in the short term. However, stock shortages are just the first stumbling block caused by bad-or no-inventory management. If you don’t have goods in stock to sell, or if you can’t find items to fill orders, you have no income. Why It’s Vital To Learn How To Manage InventoryĪny business that sells products must manage goods properly to survive. However, it’s important to know the distinctions as you grow and begin delegating supply chain and inventory tasks to staff or outside contractors. Inventory management deals with receiving, tracking and storing the products you hold, plus provides data for informed purchasing.įor a small business or solopreneur, supply chain and inventory management procedures easily meld together. Supply chain management oversees the flow of products from raw goods and production sourcing through final distribution. Inventory management is a key element of supply chain management, but the terms aren’t interchangeable. Inventory management is the umbrella term for the procedures and processes that affect ordering, receiving, storing, tracking and accounting for all of the goods a business sells.
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