Running a business is tough. Managing inventory is even harder, especially if you don't have much cash. Here are a few things you can try to save money on your inventory costs.
1. Keep It Simple
One of the easiest ways to save money on inventory is to keep your inventory list simple. Avoid having too many products, which can be hard to keep track of. Having more products also means you may need to order more inventory at once.
Instead, start with a couple of products that you know you can sell. That way, you can order inventory and get it out to customers. As you learn more about how products sell, you can look into adding more products and SKUs. Starting simple is a great way to test the market and see what works for your business.
2. Use the Right Exterior
Another thing you can do is refine the design and manufacturing of your inventory. Using quality materials will help make items last longer, so you don't have to worry as much about replacing them. Then, you can save money each time you order new inventory. You can look into different manufacturing methods, such as investment casting, to make sure the item has a good, sturdy exterior. Not only will having a good design keep your inventory in good condition, but it can stay that way for the customer. Then, your customers may want to leave a positive review for your business.
3. Ask for a Sample
Any time you create a new product, ask your manufacturer for a sample. You can use the sample to make sure the item is of good quality. If there are any issues, you can address them now before you have a huge stock to deal with. And you can use the sample to give your customers a preview of the new item. That will help build interest, so your customers may be more ready to buy when the product does launch. The sample is a great way to gauge the quality and interest, so you can order the right amount.
4. Search for Storage Space
Consider a few different storage options for your inventory to see which is the cheapest. If you run your business from home, see if you have an extra bedroom or closet to use for inventory. And if you have an office, consider using a room or closet there.
You can also look into storage units, but compare a few options. Look for one that's big enough for your needs, but find the smallest one you can. That way, you can save money on inventory storage. If no single option is the best, you can combine your home with a smaller storage unit to lower your costs.
5. Presell the Product
You may also want to set up pre orders for any new products you have. Then, you can make sure people will want to buy the product before you have to order a batch of inventory. Preorders can also give you a good idea of how many units you should order.
While you want to order enough so that people can buy the product when it goes live, you don't have to worry about wasting a ton of products. And if you get fewer pre orders than you expect, you can know not to order as much that time. Every product is different, so you can't always use past trends to predict the future.
6. Use and Review Your Analytics
Once you start selling a particular product, you can look at your analytics. Consider the sales your product is getting or not getting. If you have a few products, you can see which ones sell more than others. That way, you can make better purchasing decisions for future orders. You may learn you need to buy more of one product and less of another. Your analytics can tell you a lot about your business, so you should take them seriously. If you ignore the numbers, you could waste a lot of money on inventory that won't sell.
7. Get a Bulk Discount
If you know you want to buy a lot of one item, ask your manufacturer about a bulk discount. Some companies will allow you to buy more stock, but the price per item will be lower. Then, you can get the inventory you need, but you won't have to pay as much. Now, you shouldn't do this with every product. Reserve this strategy for your best-selling items. But it's a great way to save money on items you know that you can sell and can sell a lot.
Some distributors may have price lists for various items, and they may be reasonable. However, you may want to ask the distributor if they're willing to negotiate. The worst that can happen is the distributor says no, but you can still buy the products. On the other hand, they may be willing to negotiate with you. In that case, you may be able to lower the price a little or a lot. And if you have a big order, any change can add up to a lot of money that you can save.
If you struggle to get rid of inventory or never know what to buy, you aren't alone. But you should keep these tips in mind before placing your next product order.