Gone are the days of solely managing inventory through Excel spreadsheets and manual stock takes. Today, there are many types of inventory management systems that track inventory levels, forecast demand, and more. If you’re choosing which type of inventory management system your business needs, and trying to narrow it down from the many different types on offer, here are some questions to ask yourself to help select the right one for your business:
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The first important question to clarify is what size and stage of growth your business is in. If your operation is still small, paying a lot of money for an inventory management tool may not be worth your investment. In fact, until you get to around $100k in turnover, a spreadsheet may be adequate enough for your simple inventory needs. However, many SMBs between $100k and $100 million in turnover do find that their inventory complexity is alleviated with a more powerful tool.
Take the time to define your budget: inventory management systems can be anything from free to six figures. If you know what you’re willing to invest, it will be much easier to refine your search to a few offerings that will best suit your size, budget and operational capacity. Of course, with a huge variation in price also comes a significant variation in quality and capability, so make sure that you’re investing wisely by doing your homework.
If you’re buying an inventory management solution, make sure you know what problem that tool is going to be solving. It’s important to be familiar with your inventory processes and what specific challenges are preventing you from growing your business. Knowing the particular issues you face will make it easier to ask the right questions when choosing an inventory management system provider.
Any good inventory management system will be able to connect with the other tools your business uses daily. For example, multichannel sales through Amazon, eBay and other online marketplaces need to be supported so you can monitor inventory across 3rd party sales channels. You’ll also want to be able to connect your accounting software like Xero or QBO. If you have an online store, a seamless integration with your eCommerce platform, for example Shopify, Magento or BigCommerce, will also be necessary so that every product, order and customer can be managed in one place, even across multiple stores.
As your business expands and you add more suppliers and product lines, it becomes increasingly difficult to track and analyze stock and forecast demand. A good inventory system will be able to give you smart reporting to automatically predict demand and order new stock accordingly in real-time, making the reporting and analysis process far less time consuming, while eliminating any chance of human error.
It’s important to know who will need access to the system so you choose the one that best fits your business and team. With a cloud-based inventory management system, for example, any employee or partner of the business can instantly gain up-to-date information with no need for emails, texts or phone calls to double-check orders – everything is contained in the online system.
Be sure that you’re not making more work for yourself when choosing your inventory management system: it will be important to choose an intuitive software with great customer service support in case anything goes wrong – use your trial period to feel out the customer service levels and read testimonials from other customers. Some types of inventory management system are extremely complicated and require expensive consultants to set up and staff training to manage.
Not all inventory management systems are created equal, so it’s important to know all the facts before you dive in and choose one. If you’re ready to grow your business and simplify your inventory and order operations, start your free trial with TradeGecko today.
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