One of the biggest hassles for small businesses is tracking and managing inventory. No matter what type of online or brick-and-mortar business you own, poor inventory management can lead to major problems, no matter your industry.
Luckily, there are plenty of inventory management system options available to save small business owners time, stress, and money. Continue reading to discover recommendations that will help you improve your inventory management processes.
What is retail inventory management?
Retail inventory management is the process of managing your business’ supply chain—this includes planning, tracking, and maintaining your business’s inventory and resources over time. It requires you to make sure you have enough product to fulfill demand without under or overestimating your costs, inventory (“dead stock”), or time.
Though this may sound straightforward, as a small business owner, you likely already know that managing retail inventory and stock is anything but simple. The good news is that there are many tools that can help you.
Whether you run an online store or a brick-and-mortar location, you need a way to manage your inventory—more specifically, you need an inventory management system.
Types of Inventory Management Software and Systems
Your inventory management software is the central hub for processing orders. It makes it easy to track when more products need to be ordered, which items are selling well, how seasonal trends are impacting business, and more. With a smoother inventory control operation system, businesses can provide a better customer experience that leads to customer reviews and ultimately, more sales.
Not all inventory management systems are created equal, though—some are more ideal than others for particular businesses. Depending on your needs, your local retail business may benefit from one of the following types of inventory software.
1. Cloud-Based Inventory Management Systems
Cloud-based inventory management systems use sophisticated calculation models to provide real-time inventory updates and calculate the rate of turnover for inventory, product profits, and more. Advanced retail inventory management software provides inventory planning and demand forecasting—this means less time crunching numbers or trying to guess the future for your business. By using an inventory management system, business owners can create a smoother business operation experience for themselves and their employees.
2. Just-In-Time Stock Management
To minimize warehouse management costs, stock is ordered on demand. As a sale is completed by a customer, the product is ordered. While it’s efficient to order stock as needed instead of overstocking warehouses, it’s a system that is fragile to change. If customer demand skyrockets unexpectedly, the business may struggle to keep up. On the other hand, if customer demand drops, money hasn’t been wasted on products that aren’t selling.
3. Bulk Shipping Inventory Management
Bulk shipping is the term for when businesses buy a large amount of stock at once, storing it in their own warehouses ready to be shipped when orders come in. During times of supply chain unpredictability, it can be a lot more reliable. It gives businesses time to find new transport routes or suppliers if disruption occurs. Solutions can be found before sales are affected.
However, customer wants and needs are constantly changing. Investing large amounts of money in a product and hoping sales will follow can be risky. When consumer trends change, products can fall out of favor and businesses are left with dead stock they can’t shift.
Before choosing the management system for your business, consider the type of product you sell, the type of customer you sell it to and the industry you operate within. What does that mean for customer demand and how could it fluctuate? That will determine the decision you make about management systems.
Benefits of Inventory Management Software
Here are a few of the many benefits your business will experience when using a retail inventory management system.
1. Improved Efficiency
Product-based businesses have to toe the line between overstocking and understocking inventory. That’s why it’s important to maintain data about order levels, order fulfillment, and the fluctuations of customer demand. Inventory software can gather and interpret this data so you know exactly where you stand and what you should be ordering. Accurate reporting leads to responsive action, lowering the risk of running out of stock or having to deal with excess inventory.
2. Integration Opportunities
Inventory software can be synced with other retail marketing software and applications to systemize the end-to-end of your retail business. From marketing to payment collection to shipping, all these elements can be connected for seamless processing. Integration also enables automation—certain parts of the order fulfillment process can be automated to respond to new orders and updated data effectively.
3. Reduced Costs
While investing in a management software will cost more than running all operations on spreadsheets, it pays off. By having an accurate overview of the business, you optimize resources by ensuring you have the right amount of inventory on hand and aren’t overpaying for storage.
The 5 Best Retail Inventory Management Software for Small Businesses
Choosing the right inventory management system for your business will depend on what your business needs. As an overview of the options out there, check out our list of top inventory control software providers, bringing retail inventory management solutions to small businesses.
1. Zoho Inventory
Pricing: A scalable suite of plans starting with a free plan.
It’s great because it:
- Integrates with multiple sales channels including Spotify and Amazon.
- Provides basic inventory management tools such as barcode scanning and analytics reporting.
- Offers a free, personalized two-hour onboarding session with their product experts so you can hit the ground running and they have a free Business Resource Center for ongoing business development.
It’s limited by:
- A lack of customization.
- The basic level of features indicates small businesses could outgrow the software.
Overall: With a wide variety of options, Zoho is a great choice for small businesses on a tight budget. It offers a simple free platform as you’re just starting out, and lots of helpful add-on features as your business grows and expands.
Pricing: Ordoro has a three-tier pricing system starting with a free plan and building to the premium plan that costs $149 a month.
It’s great because it:
- Provides unlimited monthly shipping labels and the bonus of low rates from the main couriers.
- Includes an automated dropshipping feature that is convenient and easily accessible for vendors in their paid plans.
- Integrates with Quickbooks, a popular accounting software.
- Has built-in automation presets to streamline processes.
It’s limited by:
- The fact that many of its key features are only available to customers subscribed to their paid plan.
- Lack of customizable features.
Overall: While their beginner inventory management subscription option is relatively bare-boned, this software is known for being a top choice for mid-size or larger growing retailers with multiple sales channels.
3. Upserve by Lightspeed
Pricing: The cost of subscription plans builds from $59 a month.
It’s great because it:
- Is tailored to restaurants and offers end-to-end solutions from payment processing to advanced analytics.
- Has restaurant-specific features.
- Comes with live mobile app and 24/7 support for U.S.-based businesses.
It’s limited by:
- Inventory management is a paid add-on for those on the starter subscription.
- Lack of free plan and many add-ons that continually raise the price of the product.
Overall: Upserve is popular among top restaurants looking to streamline their workflow, serving the whole spectrum of businesses from casual cafes to fine dining establishments.
Pricing: While it offers free trials, the beginner package costs $325 a month and more advanced plans build from there.
It’s great because it:
- Works as an inventory management and point-of-sale (POS) system.
- Has many integrations (over 550) so you can customize your inventory management processes.
- Has a smooth onboarding process with support.
It’s limited by:
- The high price of the beginner plan.
Overall: The number of integrations to customize your inventory management and POS systems make Cin7 unique.
Pricing: Shopify subscription plans start at $32 a month,
It’s great because it:
- Can help you manage your small business as a whole—inventory management being one example.
- Allows you to handle your business’ inventory from a mobile device or desktop.
- Offers customizable alerts to help you prevent overselling and stock-outs.
It’s limited by:
- Minimal customization opportunities so a growing business could find itself outgrowing its features and functionality
Overall: Shopify is an easy first step into inventory management software because it is part of an ecommerce platform that many small businesses are already familiar with using.
How to Choose a Retail Inventory Management Software
You’ve got plenty of options for how to streamline your workflow, introduce automation to speed up processes, and keep on top of inventory levels. How do you choose the right one for your retail business?
Each software has different strengths and weaknesses and depending on your business needs, different software solutions will make more sense for you. For small business owners just starting out with retail inventory management software, stick with a tool that you think is easy enough to quick implement but also has the ability to grow with your company.
To choose a good inventory management solution for your retail business, there are several factors that should be considered including product locations (a brick-and-mortar location, a warehouse, etc.), analysis of which products are selling well versus those that are not, profit margins, analysis of when to discontinue a product, lifecycle and expiration of products, and more.
Here are some questions you should ask to find the best solution for you.
What are your business goals?
This determines the inventory management features you’ll need to bring your vision to life. Different businesses prioritize different capabilities and tracking metrics depending on what they want to achieve from order fulfillment timelines to customer relationship ratings. Keep in mind changes you plan to make in the future, such as adding a new location to your customer base, to ensure the inventory management solution you choose meets your business needs in the long term.
What is your current POS system?
It’s a good idea to reflect on the systems you are currently using, not only the POS system but the accounting software and CRM too. What do you like about it? What is it missing? Use these insights to inform your decisions for your new software. Additionally, there may be software that you would like to keep and therefore the new inventory management system you choose needs to be able to seamlessly integrate with it.
What features do you need?
The inventory management features you need depends on how your business currently works and how you would like it to work. How much product is moving through your warehouse inventory currently? You may be struggling with backorders and need an inventory system that helps you to break through that backlog. How complex are your data needs? This influences how advanced your inventory management solution needs to be and the nature of inventory reports. Some businesses require real-time sales data while others are happy with periodic updates and management tools like low-stock alerts.
What is your growth projection?
As well as understanding where you are now and what that means for the functions you require in your management system, understand where you will be in the short, medium and long term. This will change stock levels, warehouse management and what you need to do to maintain positive customer relationships. It’s not cost-effective to transition to an inventory system that the business will soon outgrow.
What are your sales channels?
The ecommerce platform you use to win customers and make new sales should integrate smoothly with the inventory management software you choose if your management system is going to be fully streamlined. Avoid blockages from one stage of the order fulfillment journey to another to be able to successfully scale and grow.
How to Attract More Retail Customers
The right inventory management software for your business helps you function more efficiently and better manage and predict inventory needs—which, in turn, leads to improved customer experiences and feedback. Additionally, by automating and centralizing your inventory management processes and data, your team will have more time to focus on things like customer interactions, effective marketing campaigns, applying information gleaned from both negative and positive reviews, and more. Try out our free Google Review link generator so you can ask for reviews with ease.
