How to Manage Fast-Growing Inventory
Congratulations! If you’re here, it means that you have a business that’s growing. Now, let us help you understand how to manage your fast-growing inventory. Yes, it can be intimidating, but there’s good news. Modern commercial warehousing makes it so that you can scale your business without losing sight of its daily operations. Perhaps you run a small company that’s seeing its first massive purchase order. Maybe you plan to add a second location to your existing business.
Whatever your situation, if you plan on sustainable inventory growth, understanding the industry is important. To help, we’ve broken down the essentials about commercial warehousing, the demand cycle, and inventory management. Equipped with this knowledge, you can take your business to the next level. Let’s dive in.
Commercial Warehousing in Ontario: Scaling Gracefully
The first part of any type of development is information gathering. Do a complete diagnosis on your business, determining assets, overheads, revenue, inventory, and receivable accounts. Before taking a step forward, it’s important to know that you have a firm footing in your current situation.
Determine if you might face liquidity issues when handling larger amounts of inventory and assess whether your procedures for receivable accounts can cover the expenses. Identify the resources available to your company, ranging from refinancing to reducing overheads. If you feel comfortable proceeding, move on to the next step.
Set Goals for Scaling
Shows about venture capitalism made the term scaling a business into a buzzword that lost its actual meaning. Scaling is a process that a business does to ensure that they have a sustainable foundation while advancing forward. Understanding how you wish to advance is important since, without an objective, you can’t really know if you succeed. Consider:
- Am I financially equipped to retail more merchandise?
- Are there any barriers to success, such as human resources or manufacturing concerns?
- If necessary, do I have sufficient assets to liquidate or refinance in order to continue this expansion?
- Is the business growing too fast in terms of hiring, production, and collections?
Ultimately, you know your business better than anyone, so make sure to do a gut check. Using the same sense that guided you this far, determine whether growing your inventory rapidly is the right choice.
Assess Demand Types
Especially if this is your first time expanding a business, it can be easy to interpret a short-term uptick in demand as a permanent trend. In reality, there are all different types of demand, ranging from erratic to non-moving to slow. Understanding how to classify dynamic market trends can help you determine what is reasonable to invest in your inventory.
From product launch to the end of its popularity life cycle, your demand goes through a unique curve, invariably peaking at maturity and declining thereafter. Knowing where on that demand curve your product is at will tell you how much focus to put into it.
Create a Financial Plan
The most important part of growing your inventory is ensuring that you can actually sell it. For this reason, there is a big difference between a purchase order and an option on your goods. At the end of the day, a small, solvent business is better than an unsustainable one that faces insolvency due to premature scaling. For this reason, ensure that you have the funds necessary to cover your plans. Consider:
- Lines of credit
- Business loans
- Assets to finance
- Accounts receivable
- Current inventory management
Inventory Tools: Commercial Warehousing at its Best
The purpose of a commercial warehouse service is to secure the space you need to store your inventory. High-quality warehouses also offer shipping, logistics, and inventory management to assist in the scaling process. If your goal is to expand, working with a commercial warehouse gives you access to advanced technology and reliable shipping. It can help achieve your goals, in more ways than one. Among the perks are:
When you find a warehouse that supports barcode scanning or RFID technology, you can better manage the flow of inventory. This advanced tracking enables you to continually remain aware of where your goods are. The technology reduces breakage and promotes efficiency by removing the opportunity for human error.
By opting for software to control your inventory, you can always tell when something nears expiration, is running low or isn’t selling. Consult with a professional commercial warehouse to determine what approach they take to automating the supply chain.
One of the perks of automation is that, through the sales process and inventory turnover natural to your business, you gather data. Analytics allow you to optimize the flow of products, improving liquidity by tying up fewer resources in inventory investments. You can track the process of your supply chain and use those insights to inform decisions about marketing, sales, pricing, and more.
The actual work that goes into unloading trucks and rail cars involves labour. Usually, it involves machinery and physically maneuvering the inventory. When you choose a commercial warehouse, look into the services it offers. These can range from 3PL skilled labour to dispatching and pick and pack services. By ensuring that your products are in good hands, you can get the best return on investment for your fast-growing inventory storage and shipping needs.
Reliable Growth. Trusted Commercial Warehousing.
Commercial warehousing is about building relationships with the companies that manage your supply chain. Once you identify a company that has sufficient space, covered, uncovered, and refrigerated, it all comes down to whether it’s the right time for your company to grow. In addition, with helpful services like inventory tracking and reliable shipping, you can dedicate your time to the company’s operation.
You focus on driving growth. The warehouse focuses on driving your product to where it needs to be. In fact, if you’ve made it this far in your business and you’re thinking about growing it further, that’s already a sign that it’s worth looking into. Success is right around the corner, and we’re here to help you grasp it.