Inventory Management Definition - What is Inventory Management

Loading...
Close

Skip to Content

Ways to sell

Online store Shopify POS Retail Package Buy Button Pinterest Buyable Pins Facebook Shop Facebook Messenger Amazon Enterprise Pricing Blog

Resources

Guides Videos Podcasts Success stories Encyclopedia Forums Free tools Free stock photos Websites for sale App store Theme store Hardware store Experts Need products to sell? Help Center

Log in Get started

Ways to sell

Online store Shopify POS Retail Package Buy Button Pinterest Buyable Pins Facebook Shop Facebook Messenger Amazon Enterprise Pricing Blog Resources

Guides Videos Podcasts Success stories Encyclopedia Forums Free tools Free stock photos Websites for sale App store Theme store Hardware store Experts Need products to sell? Help Center

Log in Get started About Careers Press and Media Enterprise

Sitemap

Business encyclopedia Learn everything there is to know about running a business Search ex. gross profit, entrepreneurship, etc. Search

Inventory Management 1 minute read

Email

Twitter

Facebook

Pinterest

LinkedIn

What is Inventory Management? Inventory management involves keeping track of a company’s stocked goods. It monitors their weight, dimensions, amounts and location. This helps business owners know when it’s time to replenish products, or buy more materials to manufacture them. Effective inventory management is essential for ensuring a business has enough stock on hand to meet customer demand. If inventory management is not handled properly it can result in a business either losing money on potential sales that can’t be filled, or wasting money by stocking too much inventory. An inventory management system can help prevent these mistakes.

Inventory Management Systems Business owners can create their own inventory systems from scratch. If it’s a large business with a lot of inventory, that may not be realistic. Some opt to purchase established inventory management software to make the process easier. These systems usually include things like item descriptions, item numbers, units of measure, and item locations in the warehouse or storage facility. To make materials and products easy to find, numbers and descriptions must be clear and easy to understand, and their organization within the system must be as logical and intuitive as possible.

Purchase Planning One goal of inventory management is to help business owners determine when to purchase new stock so they can stay ahead of demand. This is also known as a purchasing plan. Different businesses use different kinds of purchasing plans depending on the needs of their industry. For example, a small, online business might not have the storage space to keep a lot of stock on hand. In this case, they might opt for a ‘just-in-time’ purchasing plan, which ensures they receive the stock they need ‘just-in-time’ to meet demand. Some businesses base their purchasing plan on past sales data. If they know what projected sales are likely to be, they can create a stock replenishment schedule to meet that predicted demand. Some businesses also keep a little extra stock on hand in case anything is defective and needs to be replaced.

Benefits of Inventory Management In addition to helping a business stay organized, an effective inventory management system can also help: Keep the business profitable Reduce costs Achieve economies of scale Analyze sales patterns and predict future sales Analyze performance against competitors Prepare the business for the unexpected With the right inventory management system in place, a business has a better chance for profitability and survival.

Join 446,005 entrepreneurs who already have a head start. Get free online marketing tips and resources delivered directly to your inbox. Email Email address

Get updates

Thanks! We’ll be in touch. You may also be interested in: Human Resource Management Business-to-Consumer (B2C) Brand Equity Focus Group Market Research Customer Retention Resource Management Accounting Cycle Tax Identification Number (TIN)

Join 446,005 entrepreneurs who already have a head start. Get free online marketing tips and resources delivered directly to your inbox. Email Email address

Get updates

Thanks! We’ll be in touch.

Resources Online stores for sale The marketplace to buy and sell stores How to start a business Resources and tips for getting started How to sell online Start generating more traffic and sales today Ecommerce trends Industry trends and news that matters Ecommerce inspiration Ideas & examples for improving your business Physical retail Build a profitable and thriving retail business Enterprise ecommerce Expert advice for high-volume stores Business Encyclopedia Learn everything about running a business

Start your free 14-day trial today! Email Enter your email address

Get started

About Careers Press and Media Enterprise Sitemap

Online Store Sell online Features Examples Website editor Online retail Ecommerce website Domain Names Themes Shopping cart Ecommerce hosting Mobile commerce Ecommerce software Online store builder Dropshipping

Point of sale Point of sale Features Hardware POS software

Support 24/7 Support Shopify Help Center Forums API Documentation Free tools Free stock photos Websites for sale

Shopify Contact Partner program Affiliate program App developers Investors Blog topics

Terms of Service Privacy Policy

Loading...

Inventory Management Definition - What is Inventory Management

Close Skip to Content Ways to sell Online store Shopify POS Retail Package Buy Button Pinterest Buyable Pins Facebook Shop Facebook Messenger Amaz...

83KB Sizes 7 Downloads 5 Views

Recommend Documents

No documents