Whether you’re running a small, newer business or larger operation you’ve been managing for years, you need a good inventory management system. It’s especially true for running a cannabis business, which is becoming increasingly popular with more competitors entering the market. Sometimes business owners are reluctant to invest time and money into purchasing and setting up an inventory management system. However, what you need to realize is that spending time and money on this software now will save you money and make your business more profitable in the long run. Seeing the bigger picture of your shop’s trajectory is key. Today, we’re sharing five critical ways an inventory management system benefits your business.
Garnering a loyal customer base is one of the most important ways to maintain and scale your business. Consistently providing excellent service is imperative to gaining customer loyalty. And guess what? Overselling doesn’t make your customers happy. Inventory management systems help prevent this issue by syncing your orders and inventory. It eliminates the stress of dealing with unhappy customers and scrambling last minute to restock.
Avoid excess stock
On the other side of the coin, we have the issue of overstocking. Your product doesn’t do you any good if it’s taking up warehouse space and not yielding a profit. It’s tough because there’s a delicate balance between having enough inventory to meet demand and overstocking. An inventory management system cuts out the guesswork of figuring out when to place an order and how much. It notifies you when you’re running low on a product and pinpoints the ideal reorder points.
Improved cash flow
We don’t need to tell you how important it is to have a good cash flow to cover day-to-day business expenses, pay your staff, etc., because as a business owner you already know that. What you do need to know is that your inventory management system plays a big role in improving your cash flow. You can’t make money if you’re out of stock and waiting on more products to come in, or if you have shelves of excess products waiting to sell. Achieving the perfect balance of having enough product in stock and placing orders at the right time helps keep your sales moving more consistently.
Cut storage costs
Yet another reason why inventory management is so powerful in preventing overstocking. If you’re paying for warehousing or storage space, excess inventory is driving up that cost. Paying for unsold products to sit in storage puts a strain on your cash flow. Over time, these costs can add up and leave a big impact on your business’s profitability. When you have the right amount of inventory in stock, you’re only paying for what you need which will save you money in the long run.
Spoiled products are a tremendous waste of money and eat away at your profits. Ensuring fresh, quality cannabis products is so important for customer retention and having a strong brand reputation. When you manage your inventory effectively, you can prevent this from happening. You’ll only keep the right amount of inventory in stock and place orders at the most optimal time for you to meet demand, have enough product in stock, and ensure its quality.
Businesses of any size can benefit from an inventory management system. If your shop is small or relatively new, it can be a great tool for helping you scale your business. And if you have a bigger or more established business, it can help make you more profitable and reduce some of the stress of managing inventory on your own. Either way, we see so many reasons for how they can help you grow.