One of the biggest concerns in dealership management is inventory. As a dealer, you have hundreds, if not thousands, of parts in your inventory. Keeping up with these parts can be a full-time job if you don’t have a reliable inventory management system. With dealership management software, the process is much simpler.
According to Internet Retailer, Global eCommerce sales grew by 18% worldwide in 2018, with customers spending £2 trillion on the web in 2018. In this age of online shopping, customers expect their items fulfilled as quickly as possible – online or offline.
When orders come in, you must have an inventory stocking system that makes sense, so you can fulfill orders and replenish stock as needed. Just one box of misplaced parts can result in up to £1,000 in losses. Imagine the time and money lost with just one such incident, and you see why neglecting proper inventory management is costly, especially in the agricultural, groundcare, and construction industries.
Save time and money by implementing these helpful inventory management tips.
1. Perform Physical Inventory CountingYour employees may dread it, and it takes a lot of time, but taking inventory by hand is a must, even in these days of complete automation.
When you use dealership management software, you need to ensure you have correct and up-to-date counts. Failure to do so results in inaccurate inventory stock counts. It’s time to make a plan for physical inventory counting. Get in the habit of practicing a physical inventory count at the end of the calendar year. Make sure your employees are aware of the task, and that you have enough supplies on-hand for inventory. Create inventory count sheets and clearly label the location of each product on the sheet. Once you’ve finished your physical counts, enter the quantities in your software.
Another form of inventory stock counting is cycle-counting, where you break down your count into smaller, manageable parts. Instead of going through each and every part in your warehouse, you can organise inventory by different sections, then perform counts throughout the year. Consider how busy your employees are and what your needs are to decide on the best method for your inventory management practice.
RecordsDealership management software lets you run several processes of your business in one system and see all of your data at a glance. However, if you rely solely on your software’s numbers, and they’re inaccurate, you’re making a costly mistake.
When you perform physical inventory stock counting and write down the figures on paper, double-check that the figures entered are correct. You also need to ensure the details of the inventory in question are precise. For example, instead of writing the count of the item, notate the location of it and corresponding bin, aisle, etc. Generic notes on inventory stocking locations won’t guide you when it’s time to check on counts and can make the process more time-consuming than it needs to be.
Michael Coleman, the owner of Big Bale Co (South), relies on his software to keep updated records.
“Our parts department uses Gold to order and check stock and to sell point of sale parts,” he said. “We use the wholegoods module to understand the true cost of things. Our accountant uses Gold to organise and manage receipts and statements, and to run invoices once a week for point of sale or wholegoods.”
3. Have Concrete Plans for Problem InventoryOnce you’ve gone through your inventory, updated your counts, and double-checked your figures, what’s next? You need to ensure you have a solid plan for the inventory. Is your inventory aged and slow-moving?
After you identify any problems with slow-moving, aged, or obsolete inventory, come up with the appropriate actions to address the problem. Don’t just let it sit there. Keeping it in your warehouse only takes up room. Reduce it to free up space for higher-performing items.
4. Make Informed Buying Decisions for New InventoryYou’ve done your counts, you’ve checked the figures, and now you want to update your inventory with new products.
Every business may need to restock or refresh their inventory, but are you making rash judgment on what you should add? Although the temptation to refresh your inventory with new stock may be strong, it’s not wise to buy based on what you “feel” will make a good product. Gauge your new inventory purchases on thorough product research, such as consumer demand, cost of goods, and likely return. Making an educated purchase will reduce the chance of having stale and stagnant inventory in your stock.
Amy Nocetti, the Director of Commercial Sales for Winchester Garden Machinery, cautions dealers to make informed decisions, saying “Choose the products you sell really carefully, get to know your market, and most importantly, make sure you know your customers inside out.”
Dealership management streamlines inventory stocking, but if you aren’t using it correctly, you’re only hurting your business. As you go through your goods, make sure you engage in the right practices for dead inventory with our handy guide, and find a way to turn that stale inventory into cash.
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