For any e-commerce business, getting your products quickly to customers and turning a profit is one of the main goals to achieve. This means your products need to be available and ready for shipping as soon as the order comes in.
This is where having good inventory management techniques come in to smoothen your operations and grow your company. When you have the necessary items in stock and prepared a contingency plan for unforeseen circumstances, you can avoid losing money through spoilage and dead stock while saving on storage costs. With proper management of inventory, it will also lead to better cash flow.
Here are some of the techniques to help you keep your inventory in order and avoid costly mistakes.
1. Set priorities with ABC analysis
Not all products are equal â€“ some need more attention than others due to how fast they move. Prioritise your inventory management by using an ABC analysis. Go through your product list and determine which ones belong to one of these three categories:
A â€“ high inventory value or sold in large volumes
B â€“ mid-range in inventory value and demand
C â€“ low inventory value
Products in category A require your focus as they have significant financial impact but with unpredictable sales. On the other hand, products in category C account for the lowest portion for your inventory value which need less oversight.
2. Determine your minimum stock level
Also known as â€œpar levelsâ€, it refers to the minimum amount of product that must be on hand at all times. As soon as your inventory falls below this number, then you know it is time to order more. Your par levels will vary depending on how quickly the item sells and the duration is takes to get back in stock. Once you have determined this number, it will systemise the process of ordering and make inventory management a little easier.
As items are constantly going in and out of your warehouse, youâ€™ll need to ensure you have sufficient space to accommodate the different operations. Our property at 38 Ang Mo Kio Ind Park 2 offers warehouses for rent
, suitable for B1 warehouse and B2 clean purposes. Offering a corporate frontage, this general B1 industrial building has 3 connected buildings with multiple storeys. You can find in-house products such as event hall rental, self-storage, lockers, and adhoc weekend marketplace. The property can be conveniently accessed via CTE and Ang Mo Kio MRT station â€“ and you can also walk from the main entrance to nearby bustops located just minutes away. All units come in bare condition, with sizes starting from 475 sqft to 4,903 sqft with 4.5m ceiling height. Our subsidiary, Work+Store is also located within the property to provide storing and packing spaces, which can suit entrepreneurs and startups
looking for small spaces to rent for business
use. Other features of the property include 4 passenger lifts, in-house canteen, 3 cargo lifts, and season parking for heavy vehicles & cars.
3. Practise FIFO
If youâ€™re not already familiar with the importance of â€œfirst-in, first-outâ€ in inventory management, this method refers to your oldest stock (first-in) getting sold first (first-out). This is especially important for perishable items to avoid ending up with unsellable spoilage.
But if youâ€™re dealing with non-perishable products, FIFO can still work for you. Products that are always sitting at the back can get worn out over time â€“ and you wonâ€™t want to accumulate storage costs over something obsolete that you canâ€™t sell. Make sure that your warehouse is organised in order to manage a FIFO system. This would mean adding new products from the back so the older products stay at the front.
4. Have a contingency plan
There are a number of inventory issues that can come up for your business, so you need to be prepared for the worst with a contingency plan. Some examples are running into cash flow shortfall, unexpected sales spike with oversold items, miscalculation in inventory and lack of warehouse space to accommodate your seasonal spike in sales.
As such, figure out where your risks are and create a viable plan of action to address any and all situations. What are the steps to take to solve the problem? How will this affect other parts of your business? Being prepared and having the answer to all these concerns can help you avoid profit loss and a dip in customer satisfaction levels.
Preparing for an additional warehouse storage rental can also be part of your contingency planning. This is particularly important if you are expecting sales spike in holiday seasons such as Christmas or Chinese New Year periods and you need the space to store excess inventory. Our property at Space @ Tampines is a 7-storey building that offers warehouse spaces for rent. At the ground level, you can find a number of interior design and home furnishing companies, which brings a good volume of customer footfall. Meanwhile, major retailers like Courts Megastore and IKEA Tampines are located just directly opposite. With proximity to other industrial estates nearby in Changi, Seletar and Changi, it provides the ideal business space solutions for companies in Clean & B1 Light and B2 environments. If your business has heavy and frequent warehouse logistic needs, you can benefit from its favourable location that is accessible via TPE and PIE. Units in this property start from 2,629 sqft to 10,683 sqft with sprinklers, 6m ceiling height and 15kN/m2 floor loading capacity. Other facilities include 6 loading bays with dock levellers, heavy vehicle parking, wide ramp-up, 40-footer access, season parking and 24-hour CCTV & access.
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