{"id":936,"date":"2024-04-22T05:10:10","date_gmt":"2024-04-22T05:10:10","guid":{"rendered":"https:\/\/wp.megabits.com.au\/verifiedbusiness\/?p=936"},"modified":"2024-04-24T05:16:21","modified_gmt":"2024-04-24T05:16:21","slug":"the-real-cost-of-poor-inventory-management-to-your-business","status":"publish","type":"post","link":"https:\/\/wp.megabits.com.au\/verifiedbusiness\/the-real-cost-of-poor-inventory-management-to-your-business\/","title":{"rendered":"THE REAL COST OF POOR INVENTORY MANAGEMENT TO YOUR BUSINESS"},"content":{"rendered":"

Why do small businesses suffer from poor inventory management? In many cases, inefficient inventory practices are due to management not really understanding the importance of keeping sufficient stock available to fulfil their orders. This may be due to a lack of capital, because they simply can\u2019t afford to order 6 months\u2019 inventory in one hit. It can also be due to a lack of understanding about how to manage inventories or simply to an apathetic approach – that it will all work out in the end.<\/p>\n

 <\/p>\n

The real cost to your business of not handling your inventory efficiently in the short term is lost profits; in the long term can be the loss of your business. Failing to invest your time and money into proper inventory management systems can cost your company its very existence.<\/p>\n

 <\/p>\n

Let\u2019s take a look at some of the real world symptoms of poor stock control and how they relate to lost profits\u2026<\/p>\n

 <\/p>\n

Too Much Stock<\/strong><\/h3>\n

You might not think that holding an abundance of inventory could be a problem, but there are a few unexpected consequences from this management approach. With too much stock, you have invested your capital in a level of stock that is over and above your forecasted needs.<\/p>\n

 <\/p>\n

This ties up your money by reducing your cash flow, fills up your warehouse or storage facility to overflowing, and can lead to items either becoming out of date or superseded by new models. To claw money back, many businesses hold clearance sales; however, the end result is always a loss in profits.<\/p>\n

 <\/p>\n

Too Little Stock<\/strong><\/h3>\n

When you don\u2019t have sufficient stock to fulfill your clients\u2019 orders, they can become disgruntled if it happens once; but they can look elsewhere for suppliers if it happens too often. Running out of inventory has a cascade effect. You may suffer delays from your own suppliers who have to rush through your order, and you might need to pay for costly air freight or couriers to deliver the new stock to your storage and distribution centre.<\/p>\n

 <\/p>\n

So when you don\u2019t have enough stock to supply your clients, losing clients is a real possibility and trying to play \u2018catch-up\u2019 with your inventory can cost you even more money than normal.<\/p>\n

 <\/p>\n

Pricing Errors<\/strong><\/h3>\n

Poor inventory control can lead to numerous pricing errors, giving both your business and your clients no end of grief. When your clients receive invoices for items that are under-priced, they may or may not tell you. But if over-priced, you can be sure that they will not be happy.<\/p>\n

 <\/p>\n

Pricing errors are a sign that your inventory is out of control and give your clients the impression that you are not a reliable supplier. Which can be very true, regardless of whether you sell shoes, garden furniture, coffee pots or computers.<\/p>\n

 <\/p>\n

Having no stock, or not having the right stock, or being over stocked for a long period of time, means working capital allowances are either too low or simply not being deployed correctly, which can cost a business is sales, profits and market share in the long run.<\/p>\n

 <\/p>\n

Stock Turnover P.A.= Sales P.A. \/ Average Stock holding<\/strong><\/h3>\n

For more information on how to sell a business on the Sunshine Coast or in Brisbane,\u00a0contact<\/a>\u00a0our friendly team at Verified Businesses today on 07 5479 5588. You can also see our recent\u00a0market report on business sales<\/a>\u00a0in your area.<\/p>\n

Thinking of selling your business? Want to know more about how to sell?\u00a0Contact<\/a>\u00a0our friendly team\u00a0at Verified Businesses for your own\u00a0information pack\u00a0<\/a>or to book a consultation today. Our highly experienced team of business brokers are the Number #1 team on the Sunshine Coast in business sales. At Verified Businesses, success in business sales is\u00a0Verified.<\/p>\n","protected":false},"excerpt":{"rendered":"

Why do small businesses suffer from poor inventory management? In many cases, inefficient inventory practices are due to management not really understanding the importance of keeping sufficient stock available to fulfil their orders. This may be due to a lack of capital, because they simply can\u2019t afford to order 6 months\u2019 inventory in one hit. […]<\/p>\n","protected":false},"author":1,"featured_media":938,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[17,19],"tags":[],"class_list":["post-936","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","category-news","entry","has-media"],"yoast_head":"\nTHE REAL COST OF POOR INVENTORY MANAGEMENT TO YOUR BUSINESS - Verified Business<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/wp.megabits.com.au\/verifiedbusiness\/the-real-cost-of-poor-inventory-management-to-your-business\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"THE REAL COST OF POOR INVENTORY MANAGEMENT TO YOUR BUSINESS - Verified Business\" \/>\n<meta property=\"og:description\" content=\"Why do small businesses suffer from poor inventory management? 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