PART 3: GETTING THE BEST RETURN ON INVESTMENT: Maintaining, Tracking and Controlling Your Inventory
It is very feasible to start and run a successful business selling hand made products. This series of articles introduces you to the things you will need along the way as you develop your business financial management road-map, and seek to get your best return on investment (ROI).
Your Inventory Needs To Be Managed
c) ROI: Inventory Management
The Kinds Of Things You Want To Be Doing
In Inventory Management
Monitoring and managing inventory involves several interrelated activities. These activities will place time and cost burdens on you. Luckily, much of this can be computerized. There is inventory management software available, some of it specialized for the various design and maker professions. If you are selling things online, your shopping cart system will accommodate a lot of this.
These activities include:
1. Par Levels
2. Storing and Tracking FIRST IN, FIRST OUT
3. Supplier Relationships
To the extent that you can systemize all this, relying on a central, computerized database, the more efficient and effective you will be. Ask yourself, as well, whether your inventory management system will grow with you as you continue to develop and expand your business.
You always want to have the right stuff, in the right place, at the right time, at the right cost,
1. Inventory Management: Establish Par Levels
What is the minimum inventory needed on hand at all times? For example, when doing craft and art shows, you will need to have 4x the amount of inventory from what you want to sell (thus, $1000.00 of inventory to sell $250.00 of merchandise).
Do you have a tickle system signaling times to reorder?