Managing your small business inventory is a top priority. You need to track what you have (and don’t have), so you can order supplies and track sales patterns. Be as cost effective as possible by only stocking what you sell. Every business has different needs and there are a variety of solutions available to help you manage your inventory.
Inventory management software solutions are widely available, from Microsoft Office products for small business to independent software such as iMagic Inventory. When purchasing software for your small business, make sure that it includes the following elements:
1. Encryption assigns dealer codes to be followed on inventory roles.
2. Tax digest information to determine when the item is taxed (either at retail or resale).
3. Inventory tracked, a listing of SKUs of in-stock products. Some programs can be set to automatically re-order items as needed.
4. Sales price, so item prices can be adjusted up or down as part of a trend across the inventory.
5. Last sale date tracks sale history to measure movement rate of items at all price points.
6. Costs to track trends in sales and retail prices.
7. Sales traffic reports total activity of a single product or group of products as they flow in and out of stock.
8. Quantity price structuring tracks and maintains quantity levels to create basic order reports. Should self-adjust to reorder more or less based on product movement.
9. Alternative vending information provides second or third sources for products
10. Totalizer records adds up total on-hand money, purchase units, purchase dollars, credit lines, unit sales totals and more. Shipping information can be projected using order histories and order confirmations can be produced regularly.
You can compare software products at POSSoftwareGuide.com. The pros of using this type of software include accurate inventory records, increased efficiency of supply orders and decreased cost of hand counting and recordkeeping. Cons include confusing software training, human error and the need for constant software updates.
Average cost: $200 to $300 for one license. The cost increases per license, up to $8,000 or more for 50 licenses.
Some small businesses use online inventory management solutions instead of in-house software. These programs work the same as software, but you don’t have to install anything on your computers. This can save valuable hard drive space and serves as a permanent off-site backup for all your inventory records. Drawbacks include server problems and paying higher annual fees for the service.
Average Yearly Cost: $900 to $1,800 for one license and unlimited web training and support (phone calls are usually limited to a few per year). The cost increases per license, up to $40,000 or more for 50 licenses.
Third-party inventory management solutions come in to account for current inventory and place orders based on sales and projections. They also specialize in demand forecasting, supplier management, billing and warehousing to help streamline your business. The downside to using third parties is cost and occasional reduced access to inventory.
Average Cost: Varies greatly. Request quotes.
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