Holding onto inventory is always a tough decision, but it's even more difficult when you're trying to figure out the best strategy for your company.
The goal of taking stock should be to reduce risks and potential losses from shortages or empty shelves, while seasonal demand fluctuations may require companies to take higher levels at certain points throughout their business cycle. Which means they'll need some extra space too.
Whatever your reasons for holding assets, it's important to manage the investment in a way that increases the advantages and lowers risk. Sometimes just an old-fashioned inventory spring clean will do.
What Is an Inventory Spring Clean?
An inventory spring clean is the process of evaluating your asset levels, purging out obsolete or unwanted items, and ensuring you've got accurate information about everything still in store.
Maintaining an accurate inventory isn't just a good idea because it helps companies avoid unnecessary expenditures; it's also critical for maintaining optimal asset levels and ensuring products are easily accessible.
Benefits of Inventory Spring Cleaning
There are several reasons inventory spring cleaning is the best option for businesses of all sizes.
Renewed Focus on Clear Goals
Having accurate information about what products you're holding, which products are selling well, and why it's essential to know where you stand in terms of stock levels will help companies maintain strong connections with consumers.
The inventory provides your organization with a common baseline of facts shared across the board that can pull every player in every aspect of your business together to work hard to achieve the same goals, which can strongly impact overall productivity.
Increased Sales and Revenue
A complete overview of inventory levels allows companies to better understand which items are in high demand and consider how they can improve their sales efforts, particularly promotional events such as sales and seasonal events.
This information can also help companies get a stronger return on investment by identifying where they should focus their efforts and resources to get the best out of every sale.
More Effective Use of Space
If your store or business has an excess of assets, it's time to conduct an inventory spring clean to clear out anything that is obsolete, low in stock, and items that aren't selling.
By promoting effective merchandising techniques to highlight the products in the highest demand, you can ensure that your shelves remain focused on as few as possible to give maximum impact.
Improved Accounting
One of the best parts about inventory spring cleaning is that it allows businesses to improve their overall accounting process.
Accurate information about what they're holding is a great way for companies to create more accurate financial forecasts and performance reports that are essential in a business environment where every cent counts.
Reduced Costs
Inventory spring cleaning can help businesses cut down on unnecessary expenses. Clearing obsolete or unwanted items will allow companies to reevaluate their storage options. If they store less but still maintain enough inventory for all of their needs throughout the year, they effectively save money in the long run.
Businesses can make purchases better suited to their needs by conducting an inventory spring clean and maintaining those asset levels.
Improved Customer Service
Keeping accurate information about what's in store is one of the best ways to provide excellent customer service throughout the year. It allows employees to focus on providing as much information as possible, and more easily make customers aware of the best ways to access those products (such as by ordering online). Etsy also recommends excellent customer service as one of the tips in starting a business.
Reevaluation and Strategy Adjustment
Inventory spring cleaning allows businesses to reevaluate their overall stock strategy and ensure that they're getting the most out of every purchase — whether it be through sales, new equipment, or storage options.
It also allows them to make decisions without waste, freeing up their resources for other critical tasks while still getting the same job done.
Inventory Spring Cleaning Tips
Inventory spring cleaning is a great way for businesses from every field to reduce costs, increase productivity, and better connect with customers. By following these tips, you can ensure that your entire inventory strategy is running smoothly.
1) Sort Through Your Inventory
It's a good idea to sort inventory into three piles: items that you want to get rid of completely, obsolete items to sell off, and items that you should relocate.
2) Start with the Most Dangerous Items
These items are usually dangerous to own, dangerous to sell, or both. For example, if you've got an old gas can in your store that hasn't been used in years, you might want to get rid of it.
3) Prioritize for Speed
If you're looking to clear out your inventory before the end of the month (or quarter), prioritizing what needs to be done first is a great way to speed up the process.
4) Investigate All Sales
It's a good idea to check on all of your sales channels, including online and in-store, as well as alternative marketplaces such as eBay and Craigslist.
QR codes are an important tool for inventory management and manufacturing because they allow you to track more than just the name or price of a product, but serial numbers, as well, which can be used when managing parts inventory in your business.
5) Sell-by Date
If you have products marked with an exact expiry date, it's best to clear them out before they become unusable.
6) Remember That You're Not Alone
Many businesses have undergone the same problems; their experiences can help you identify the best solutions for some of your biggest inventory spring cleaning issues. There is also software available that can help to make your inventory spring cleaning process much more manageable.
7) Take Advantage of Opportunities
If you've got items that are worth very little but in great condition, hold onto them until the market changes for those products (or until you use them yourself).
8) Don't Underestimate the Value of Storage
It's a common mistake to focus on what you're going to do with individual pieces of inventory when, in reality, the most important thing is how they fit together.
By thinking about your inventory as a whole, you'll be able to find a solution that works best for your business.
9) Don't Fear Change
If you have a lot of items that you can't bear to part with, that's okay. However, it's important to accept the fact that change is inevitable and that sometimes those pieces need to go, even if they've been staples of your inventory strategy for years.
10) Don't Forget about Your Other Resources
As well as inventory, you also need to think about your labor, human resources, storage space, and facilities — all vital elements of your organization that can help you decide what needs to stay and what needs to go.
11) Identify the Problem
If you've got a lot of slow-moving inventory, it would be best to investigate why that is. For example, you might find that your customer base isn't large enough or not fully informed on accessing the items in question. There are several potential problems, but identifying them in advance will help you take appropriate action before it's too late.
12) Identify the Solution
While you might not have the right solution in place yet, it's a good idea to start looking for potential solutions that could help your business.
However, it's important that you don't try to do everything at once or before you're ready. As well as taking inventory of your overall strategy, take inventory of what will work for your business, too.
13) Assess the Benefits
Don't just think about how inventory will benefit your company, but also consider what that inventory will cost you.
Consider selling off assets that are not bringing in enough money instead of letting them take up precious space doing nothing beneficial for your organization.
14) Inventory Is Only One Strategy
While it's important to get your inventory in order, remember that you don't have to do it all at once.
It's also important to remember that not every solution works for your business, so make sure you're only putting time and resources into the strategies that make a real difference.
15) Get Rid of What's Not Working
If you've been thinking about getting rid of a certain piece of inventory for a while, there's a good chance it's time to do so. Even if it means taking a small loss, sometimes it will be worth more in the long run.
16) Get Organized with Your Storage Space
Consider reassessing your storage space for the opportunity to organize your items better. Organizing your space helps you determine if there is any extra space available for new inventory and how much.
17) Do Some Spring Cleaning
Instead of just doing a large-scale reorganization, why not try a little spring cleaning? If you've never gotten rid of anything before, this could be the perfect time to sort through your inventory and see what's been sitting around for too long. You never know when a good deal might come along.
18) Don't Forget How Important Organization Is
While it's great to get your entire strategy in order, don't forget that organization is important for making things flow smoothly. You can organize your storage space however you like, but make sure you're doing so in a way that everything will be easy to find and access when needed.
19) Take Inventory of Yourself
While it might not seem like something that relates directly to your inventory, you should also take inventory of your abilities and skills. For example, if you're good at computer work, it's a great idea to put that skill toward data organization to benefit your entire company.
20) Inventory Isn't Just about What Is There
Don't forget to consider why certain items are in your inventory and their value to the business.
If an item has been around for a while but isn't doing anything beneficial, it might be worth finding a new place for them or replacing them completely.
Conclusion
While it might seem like an easy step to skip over, taking inventory of your business is one of the most important steps you can take. Without a proper inventory, you cannot get a clear picture of what's going on in your company — limiting your ability to identify any problems until they've already started affecting operations.
Even if you don't want to create an inventory system from scratch, it's important to at least take inventory of what you already have. The information makes it easier for any professionals you hire to know which items they can use and organize.
Don't forget that organization is just as important as your inventory itself. If items are going to be easily misplaced or damaged because they aren't properly cared for, it might be better to get rid of them so you can free up storage space.
While spring cleaning is all about getting rid of items that aren't doing anything beneficial for your company, don't forget that sometimes selling off inventory (especially obsolete inventory) can be just as beneficial to your business.
If you take the time to invest in creating a good inventory system, you might find it worth the effort to put all of your items on sale and move them out of your warehouse successfully while bringing in some extra cash.