Effective inventory management is essential for a wholesaler in order to maintain order and efficiency, which will eventually translate into a more flourishing bottom line. It is difficult to achieve this however, without the help of custom-designed tools such inventory management software. Here are some reasons why proper inventory management is beneficial to wholesalers.
Ignorance is not bliss, knowledge is
It should be the prerogative of every wholesaler to know exactly how much inventory they are required to supply customers and therefore how much they need to order. However, inventory is not just limited to what comes in must goes out. It is essential to have a small amount on hand if supply systems are compromised for whatever reason, or for customer demand that exceeds what was forecasted. Additionally, it is vitally important to ensure that all inventory in stock is known about and has a purpose in order to avoid losses due to expiration for example. To fulfill all these criteria, it is extremely handy to have inventory management software which is custom-designed to keep track of inventory coming in, inventory going out, where inventory is being housed and forecasting of upcoming customer demand.
Inventory management software, such as Unleashed Software, will free up your time for other important operational activities as you will no longer have to monitor stock levels and orders, ensuring one meets the other. With all company data saved to the software, stock alert levels can be brought to your attention automatically based on what inventory is available and how much lead-time is required for your supplier. It essentially does all the monitoring and guesswork for you, allowing a degree of confidence in inventory and supply.
Impact on finances
Proper inventory management has a huge beneficial effect on the company’s finances. This is because with acute knowledge of inventory needs, ordering can be optimized creating a streamlined process of inventory in versus inventory out. The result of this optimization on the bank balance is very pleasing indeed. No longer is money wasted on over-ordering and having stock expire while not being used or sold. The ability to accurately forecast trends and customer demand can also be positive for the bank balance, as the company then has the ability to lock in good deals with the supplier, take advantage of bulk offers and optimize shipping and therefore reducing handling costs.
The wholesaler’s sales are only as good as their reputation with their customer, and being able to always supply the right amount to the customer with no delays will certainly improve the business relationship. Cost is not the only consideration when choosing suppliers and customers can easily be irked when the service they have received is less than optimum. They also seem to recall these experiences very easily when commenting to other potential customers, so it is very important to keep supply consistent and reliable in order to maintain your good reputation.
Life for the wholesaler can be very busy and complex indeed, with constant monitoring of stock levels and customer orders, ensuring everything is kept nicely in balance. This can chew up a lot of time and therefore money, and this is assuming that all the ins and outs are known about. Inventory management software takes control of every aspect of the business from ordering; shipping; storing and selling, ensuring each is optimized and company operations are streamlined. Such control is not only good for management and reputation but can also have a positive impact on the profit margin.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.