What The Ascent looks for in a great inventory management software
You can’t choose your inventory management system in a vacuum. Finding the right inventory management system requires full knowledge of your overall business, where it’s at now, and where it’s going over the next couple years.
Your consideration and decision must also be based on a complete understanding of the inventory movement through the business.
Are you managing inventory coming in from a few vendors to a single retail location? Are you working with a fluctuating cast of suppliers? Do you need support managing incoming orders and outgoing fulfillment needs across multiple warehouses? Questions such as these should be easy for you to answer before you start analysing inventory management systems.
Efficiency is a pillar of properly implemented inventory management systems, and much of that efficiency is rooted in the newfound automations unlocked by the inventory platform throughout your operation.
Critical inventory management automations include programmable reorders, stock transfers, retail software integrations, and more. Each automation puts more time back in your day to focus on critical needs. They also provide greater accuracy by lessening the natural and negative impacts of human error.
Inventory management is a critical business component, but it does not exist in a vacuum. So neither should your new inventory platform. Your new system should empower you to manage inventory as you see fit, whether you practice periodic or perpetual management, a hybrid of the two, or something else entirely.
A great inventory management system needs to be adaptable and able to integrate with other essential business software. This includes, but is not limited to, retail and e-commerce platforms, shipping and order fulfillment tools, warehousing management software, and business accounting, reporting, and analytics tools.
Most of the newer, SaaS-based inventory platforms are designed to integrate across platforms. It’s the on-site, legacy platforms that you’ll need to dig into for their adaptability.
As you’re searching for the best inventory management platform, you need to consider current needs as well as short- and long-term future needs. This means planning for capabilities that you might not yet need. And it also means factoring in pricing components that may not scale as your SKUs and inventory counts grow.
From a components perspective, you may want to consider whether your inventory system can scale to manage warehouses and/or shipping and order fulfillment.
You may be a small retailer, but what if you add another location or two over the next year? If that requires a central warehouse for your inventory, you’re going to need warehousing management support. It doesn’t have to come from your inventory system, but it could — and you might want it to.
The same is true for shipping and order fulfillment. Maybe it’s something you’re currently outsourcing but want to bring in house once you reach a certain order volume.
Scalability for inventory management pricing is also crucial. If you’re paying per SKU, charged per order, or some other volume-based pricing, that will get expensive as your business scales. It may not be totally avoidable, but a favorable subscription price now with SKU fees may become untenable in two years.
How your business can benefit from using inventory management software
There are few things more tedious than manually taking inventory counts. You and your team no doubt have better things to do than counting stock as you walk through your store or warehouse aisles. The time saved with an inventory management software is massive and hugely impactful for your business, and it’s just the beginning of the benefits that inventory platforms provide.
Here’s a rundown of three primary benefits that the right inventory management system will provide to your operation.
Increased insights and transparency
Even for a small online store or a single-location retailer, managing stock can be rife with challenges. Human error around misplaced and miscounted items is always a possibility. But looming larger is the lack of clarity and insight into key inventory, sales, and business metrics.
It’s incredibly difficult to sustain growth as an inventory-heavy business without transparency and analysis into core measures. Inventory management software unlocks the metrics and empowers users to make smarter, quicker decisions to boost their business. And insights from integrations such as inventory accounting tools further optimize your decisions.
A delicate balance is needed to manage inventory across multiple warehouses and various physical and online stores. Inventory management platforms are essential for achieving and maintaining this balance. If you have or plan to have multiple locations through which your inventory moves, then multi-location management needs to be a priority on your checklist.
Multi-location management tools centralize the flow of your inventory through your various channels. They provide general snapshots of business-wide inventory counts, drill downs into location-specific quantities, and individual item quantities across locations. This is all helpful for maximizing your resources and inventory investments.
The more inventory you sell, the more inventory you have to restock. That’s simple enough. But it’s not always a one-for-one replacement. And you’re not necessarily getting all your inventory from a single provider. This is why a centralized order fulfillment system is a critical feature in your inventory management software.
A centralized tool for managing your various vendors and orders is crucial as your business grows and reordering becomes more nuanced. Look for a system that allows you to set repeat purchase orders, easily adjust quantities, track inventory shipments, and easily communicate with vendors.
Along with ease of use and proper management, all of these capabilities will help ensure that you’re optimally restocking inventory rather than purchasing too much or too little, overextending your resource or missing out on potential sales.