With schools starting up around the country, retailers and other small businesses need to maximize their working capital to ensure they're fully stocked with inventory. As waves of families embark on their back-to-school shopping excursions, not having enough inventory on the shelves can be a major missed sales opportunity for small businesses in a position to provide goods and services to this market segment.
But having the appropriate amount of goods can be a tricky balancing act. Not enough inventory can leave customers frustrated. Conversely, too much product can leave the small business overleveraged and lacking working capital. Thankfully, by implementing a few solid strategies – such as streamlining the supply chain and adopting a just-in-time inventory system – small business owners can find the solution they need to ramp up and prepare for the rush of back-to-school shoppers.
Further, the back-to-school shopping season can be busy, but it's not as hectic as the upcoming holiday season. This means testing out these inventory strategies during the back-to-school shopping season offers up a good way to smooth out any bumps during the implementation so that they can also be used to a much greater effect during the bustling and highly lucrative end-of-the-year holiday season.
Streamline the supply chain
Eliminating any knots or hiccups in the supply chain is crucial to ensuring inventory arrives on time and at a reasonable price from the vendor. Any delays can be costly.
Thankfully, the Internet of Things – the interconnected system of real-time digital trackers, monitors and other sensors – has created an environment that allows small business owners or their warehouse managers to more effectively manage and time the shipment of their goods or inventory through the supply chain. And businesses are taking notice of the benefits. According to a recent survey of manufacturers and retailers conducted by Eyefortransport, 64 percent of respondents already have an IoT strategy in place, or they plan to implement one soon. Further, 87 percent want to expand their usage of the IoT.
With greater control over the supply chain, small business owners can better streamline orders, deliverables, vendors and other aspects of this crucial component of their operation.
Implement a just-in-time inventory system
On the one hand, a small business wants to ensure it has enough inventory to meet customer demand. However, on the other hand, ordering a big shipment of inventory requires storing all of this merchandise until it's sold. For some small businesses, this means using warehouse space to hold all of this, which also involves additional overhead costs. This isn't necessarily cheap either, as employees are needed to organize inventory, and warehouse utility costs can also seriously eat into profit margins.
As a way to reduce overhead warehousing costs, many small businesses are turning to just-in-time inventory methods. As noted by the Houston Chronicle's Small Business section, JIT processes attempt to avoid a scenario wherein a business ends up with more inventory on hand than there is demand for the product.
With the rise of decentralized distribution centers and the growth of reliable overnight mailing options, there has been a reduction in delivery times for a whole range of different products, materials and goods. Best of all, a JIT inventory system means you need less warehouse space, which ultimately lowers the overhead costs associated with storing these products.
By combining an IoT strategy with a JIT inventory method, small businesses can ensure they're running a Goldilocks operation: not too much inventory and not too little, but just enough.
Consider alternative financing
No matter how streamlined your supply chain is or how instant your just-in-time inventory system is, without access to the capital needed to purchase more products, you can still find your small business missing out on the back-to-school shopping crowd.
Thankfully there is a quick and easy solution to ramping up your inventory count. Obtaining a small business loan from an alternative lender opens up a channel to the crucial working capital necessary for buying more stock. And with approvals in a little as 24 hours, small business owners can get the funds they need immediately for replenishing any sold-out items.