How to Manage Your Small Business Inventory with Software

I grew up in a home of movie lovers. We had piles and piles of Sony VHS cassettes, each of which contained multiple films that had been recorded from television broadcasts. Whether you wanted Brigadoon or Turner and Hooch, we had you covered.

But as our collection grew, so did the headaches. Our VHS cassettes weren’t organized in any particular way, so if you wanted to find a movie, you were forced to sort through dozens of tapes until you saw the label that contained the handwritten title of your chosen movie.

I assumed all movie collections were this jumbled. Then I went over to the house of my friend, Bill Carter. The Carters were even bigger movie buffs than my family, and they had thousands of movies on VHS cassettes in their family room. You’d think their collection would be even more chaotic than ours.

But the Carters had a system. Each VHS cassette had a label with the handwritten names of the various films, in addition to a unique number. That number corresponded to the comprehensive list of alphabetized movie titles the Carters kept in a binder. You could find Turner and Hooch in a matter of seconds, while it might take you half the day to locate it at my house.

This experience taught me a couple of lessons at a young age. First, VHS cassettes are clunky and hard to organize. If Reed Hastings could’ve hopped in a time machine and pitched me his idea for Netflix back in 1989, I would’ve been his first investor (with the $11 that I had in my piggy bank at the time).

The second takeaway was the importance of a management system. A modest-sized inventory without organization is a mess, while a massive inventory that is categorized and understood can be a marvel. You’re only able to get out of an inventory what you put into understanding it.

Managing Everything With Small Business Inventory Software

While the Carter family’s binder of movie titles was a wonder to behold, it could never meet the demands of a modern small business. What you need to effectively run your business is reliable inventory management software.

“Before a small business can reasonably make a promise to supply its customers, it needs to have some assurance that it has what its customers have ordered,” explains business operations expert Gary Marion. “For a small business to have control of its inventory in this way, it needs to have processes in place to count, verify, and audit all of the items in its inventory. The goal of any inventory control system should be to have 100% accuracy. That means that you not only know what you have on hand but how much of that is available to ship.”

What is small business inventory software, exactly? It’s a resource that helps you keep tabs on your goods and inventory. We’re not talking about just what’s in your warehouse—these sophisticated programs capture the entire picture. So you’ll know where things are at the start of the supply chain, how the shipments are progressing, what your current levels look like in the warehouse, how many current orders you’re processing for customers, and when those orders will be delivered.

Can you imagine how helpful that kind of visibility would be? If you don’t currently have such a system, you’re operating with serious limitations. It reminds me of a time I was fishing on an Alaskan river several years ago. The sun glared brilliantly off the water on that bright summer day. Most of the other anglers wore polarized sunglasses, which reduced the glare and allowed them to see into the water. I’d accidentally left my sunglasses at home, so I could only see into the water directly in front of me. If I looked to the left or right, the sun’s brightness overwhelmed my vision.

I spent 4 hours on that river without catching a single fish. The other anglers could see numerous fish in the water due to their enhanced visibility and would cast directly to them. I’ll bet the average catch rate was 7–8 fish per angler. But I was constrained to the little bit of water I could see directly in front of me. I could obviously cast in other directions if I wanted to, but I was only guessing. Random casts just won’t cut it when you’re trying to sight-fish for trophy salmon.

Likewise, you’ll be at your best as a business owner when you’re able to see your inventory situation from every angle. Even complex supply chains become approachable when you can focus on specific segments. Your understanding and control of various situations increase substantially.

What’s the Current State of Your Inventory Management?

Every small business has its own strengths and weaknesses. Perhaps your inventory management is as top-notch as can be. Or you might be struggling to expand your view beyond what’s just in front of you. Regardless of the situation, it’s clear that improvements can always be made.

“The supply-chain disruptions rippling across the business world are taking a heavy toll on small US companies, which have fewer resources to absorb or push back on price increases and less leverage to pass along the higher costs to customers,” reports The Wall Street Journal. “44% of small businesses reported temporary shortages or other supply-chain problems in March, according to a survey of roughly 800 companies by Vistage Worldwide Inc., a business advisory firm. A US Census Bureau survey of small businesses, completed in early April, found supply-chain disruptions in wholesale trade, manufacturing, and construction, among others. Multiple forces are driving supply-chain woes, from coronavirus infections among employees and temporary business closures to increased demand as vaccines take hold and restrictions ease.”

There’s never been a more important time to get your inventory under control. If you don’t put real effort into managing it, there will be chaos, headaches, and possibly tears.

You can start taking positive steps by testing your current approach to inventory management. First, conduct an inventory audit. This is where you’ll scour your inventory and then compare that to your financial records to ensure they correlate. Knowing what you have under your own roof is the essential first step to getting your processes streamlined.

But what about your customers? Reach out to your customers to learn more about your small business results. This can be done with a simple email survey. Here are some of the questions to ask:

• How often are your orders accurate?
• How often are your orders on time?
• How often are your orders late?
• How often are your orders incorrect?
• What other issues have you experienced with your orders?

Once you’ve gathered information from your audits and customer research, you’ll be ready to take action. And that requires you to find the best inventory management software for your unique needs.

Choosing Your Small Business Inventory Software

As with any other business solution, there is no universal champion when it comes to inventory software. The system that works for you could be utterly inadequate for the needs of my business. So you’ll need to get insights from trusted sources and then conduct your own due diligence to find an option that’s an ideal match for your needs.

Start by talking to other business owners in your network. Find out what systems have worked for them and what red flags to beware of. Cross-reference these opinions with online reviews to begin narrowing down your options.

You’ll also want to consult with a trusted business mentor who can analyze your current challenges and recommend solutions. Whether you connect with your mentor through established industry connections or a resource such as SCORE, their wisdom can provide a massive advantage.

“Research shows that 70% of mentored small businesses survive past the five-year mark—nearly twice the rate of non-mentored businesses,” explains a small business report from Forbes. “Finding the right mentor can prove invaluable for the long-term success of your business […] A mentor is there to guide, advise, and educate you in areas where you may not have experience. Before you start your journey to find the right mentor, identify the areas where you’re struggling the most. While even the best mentor will not fix all your problems, finding a patient and understanding mentor who has strengths in areas you may not can prove endlessly helpful.”

Aided by the advice of your mentor, you’ll be able to narrow down the field even more. Here are 6 of the chief considerations for your inventory software or inventory management app:

1. Does it align with your type of inventory (such as finished goods versus raw materials)?
2. Does it allow you to scan barcodes?
3. Does it send alerts when issues occur?
4. Will it play nice with your business’s other systems?
5. Can it accurately forecast your needs?
6. Can it grow with your business?

You might find that no system truly provides a perfect alignment with your business needs. While this is to be expected, you shouldn’t have to make too many compromises with the system you choose. Your match is out there—you’ll just need to put effort into finding it. To help you get the lay of the land, let’s take a look at some of the most popular options on the market.

TradeGecko

This small business inventory management software is cloud-based and provides a robust suite of features. Better yet, it’s one of the most user-friendly options on the market. The interface is easy to learn, and you will likely be able to start exploring the various features without much trouble.

The management capabilities of TradeGecko extend to multiple locations, so it’s ideal for those who have more than 1 warehouse. Many times, small business owners find inventory solutions that work great for a single location but struggle to link up with a more complex structure.

This product provides alerts and notifications to help you streamline your processes and avoid snafus. You’ll also get forecasting capabilities that inform your strategies moving forward.

Stitch Labs 

Here’s another cloud-based software option that you should definitely consider. If you’ve used systems in the past and are familiar with their functions, Stitch Labs can be a solid contender. Given its sophistication, however, business owners who rely on legacy technology should avoid it. Put simply: This is not a particularly easy software product to use. And if you choose to go with it, don’t throw away the instruction manual!

Reporting is the name of the game with Stitch Labs. You’ll be able to keep track of purchase orders, bundling, cost allocation, sales velocity, historical stock, supply chain location, and other key factors. Armed with this data, you can reduce inefficiencies and create better strategies for growth.

Orderhive 

As a small business owner, automation can be 1 of your best friends. Orderhive may not be the easiest system to work with, but once you figure it out, you’ll be able to streamline your processes and automate some of the functions you currently have to handle manually.

Because Orderhive is on the more advanced side of things, sign up for the trial period so you can make sure it jives with your business before you pay any money. If you end up taking the plunge, you’ll likely see some big advantages for your business.

Zoho Inventory

For many observers, artificial intelligence presents as many concerns as it does opportunities. After all, how will we benefit from better predictive software if we’re ultimately enslaved by machines within the next 50 years? I don’t view AI with as much trepidation as many of my colleagues, but I realize that it raises some tough questions.

If you want to experience the feel-good side of AI, check out Zoho Inventory. This powerful resource uses advanced programming to give you better control over every aspect of your inventory. Worried about shipment? Zoho Inventory can help that. Are purchase orders getting jumbled? Zoho Inventory can clean that up in a jiffy.

With the AI aspect of this inventory management software, it’s not surprising that it is particularly adept at helping small businesses thrive on digital platforms. So if you use Shopify, Amazon, or other platforms to generate sales, Zoho Inventory could be an ideal solution.

ShipMonk

A common issue with small business inventory management software is that it doesn’t have the scalability to comfortably allow you to become a less small business. ShipMonk remedies this issue with an easy-to-use dashboard, compoundable features, and a diverse suite of tools that can match your needs just as well next year as it does today.

ShipMonk is designed with syncing in mind, so it’s compatible with nearly every POS system and a wide range of online marketplaces. You’ll get in-depth analytics and the tools needed to keep your inventory moving at an optimal pace.

eChannelHub 

Modern businesses often need to embrace a multi-channel approach to succeed. With eChannelHub, you get a powerful hub that can manage it all. As the name suggests, it’s ideal for your endeavors in the e-commerce world. And even though the technology is sophisticated, it’s put together in a way that even moderately savvy users will be just fine.

When used effectively, eChannelHub can save you a lot of time by simplifying the time it takes to manage a multi-channel business. What will you do with that extra time? Possible ideas include training your staff, auditing your social channels, developing a disaster plan, or binging the first 3 seasons of The Office. Whatever you do with that extra time, the takeaway is that you’ll be freed up to invest your energy into other aspects of your business.

inFlow Inventory 

If you’re the type of person who sometimes struggles with modern technology, you should pay extra close attention to inflow. Designed for the type of people who haven’t upgraded their smartphone since 2010, this inventory software is simple to use and loaded with support resources.

Luckily, you don’t have to sacrifice a lot of features to get this ease of use. You’ll find that inFlow still gives you the ability to track things from start to finish, with visibility and reporting taking top priority. You’ll also get helpful alerts to keep you on the ball and make sure you take the necessary steps to keep things moving smoothly.

Whether you decide to go with ShipMonk, Zoho Inventory, Stitch Labs, or 1 of the other dozens of top-notch options on the market, your dedicated use of inventory software can make a huge impact on your business’s processes. And the great news is that when you improve your processes, you’ll always improve your bottom line.