The strategic use of storage units can help a small business manage inventory. But it can also make the job of ensuring a good turnover of your inventory more challenging when using multiple locations or this type of off-site storage. A few inventory management tools and habits can make all the difference.
What are some of these ideas you can steal from larger companies? Here are a few of the most valuable ways to manage turnover.
1. Track Stock in Written Form
A small business often uses informal methods due to its perceived low volume of work. You may, for instance, rely on memory to know what you have in stock at any given time. But inventory management should always include written tracking of what’s on hand, when it leaves, and when it is replaced. Memory is a faulty tool, and informal notes get misplaced or become out of date.
Any small businessperson can do written inventory tracking in a number of ways that best suit them. It can be as simple as placing an inventory list by the door of the storage unit and adding or marking off what comes in and goes out. Or you can make use of the many cloud-based tracking software choices or apps to digitize the process.
2. Use First In, First Out Practices
How do you pull stock when something sells? If you simply go into the storage area and pull the first available item on the shelf, you don’t know how long it’s been there or even what it cost to purchase or make. A better system is to start utilizing an inventory method called first in, first out (FIFO). FIFO ensures that nothing sits forgotten on the shelf, expires, or goes out of date.
FIFO begins when you bring in new stock to be stored. If you get in the habit of placing new stock behind or underneath old stock, the oldest pieces will always be the first to choose from. You may also need to label segments of stock with the dates they were added so you know that you’re removing older items first.
3. Separate Low- and High-Turnover Stock
If all your inventory is stored together, you can easily become misled about how it’s turning over. After all, you constantly enter the storage unit to pull stock. You’re also focused on the particular items needed rather than what’s going on around it.
Instead, consider placing less- and more-popular stock items in slightly different locations (but with the same inventory tracking method across the board). Usually, this method places high-turnover items nearer the storage unit doors. This separation benefits you in several ways.
First, pulling high-turnover stock will be easier and more efficient, freeing up time to do more inventory work in other ways. In addition, you will be better able to see how much of these high-turnover items are left at any given time, reducing the chances of unexpectedly being over- or under-stocked. Finally, isolating less popular items helps you see what’s not actually moving.
4. Use Business Forecasting
Forecasting is an important business tool, but it can be difficult. As you spend more time in business, you’ll get a better sense of how your particular business cycle is. You can also examine the records provided by your sales platform, shipping records, or invoices for what you purchased as inventory.
Use these not for specific bits of information but for patterns — such as the months or days of months particular lines grow or shrink. This way, you will tailor your purchasing and promotional efforts to keep things flowing rather than piling up.
5. Keep Everything Accessible
It may seem somewhat obvious, but one important element of making sure nothing gets forgotten or expires is the ability to access everything. If inventory items get pushed farther and farther back or other goods are stacked on top of them, they’re more likely to linger and stagnate. You may forget about them or you may find that it’s just too difficult to get to and sort through them.
Instead, design a storage unit that provides immediate and comfortable access to as much as possible. This encourages you to keep better track of everything. Rent a unit that’s larger than you may feel you need so that you have space to navigate around, can pull and sort through bins, and that everything is within easy reach. In addition, invest in proper storage tools based on what’s best for your stock.
As you store and manage your inventory better, you’ll be able to ensure that no stock is wasted by low turnover. Want more ideas to successfully use a storage unit for business inventory? Stop by North Star Mini Storage today and speak with our storage experts. And then you can begin improving your turnover rates to reduce financial loss and help your business grow.