It’s very difficult to understand the requirements of the market and how to pertain to them. You can’t always know what might sell and what the customers might not show interest in.
Everyone has different needs and it’s important to stay open to all the products that you can sell in your store. Another thing that many don’t understand is that you shouldn’t overstock just because the product is selling.
Understanding the frequency of customers and the overall demographic of your region is also quite necessary. Many such unsaid rules are what lead to inventory spoilage. Experienced businessmen consider it as common knowledge and those who are still learning sometimes fail to understand its relevance.
Here, we’ll discuss what new businesses can do to avoid inventory spoilage.
Follow the ‘first in, first out’ rule
While setting up your products for display, you should understand that the further you push back the older products, the more difficult it will be to deal with them. Customers would rather buy fresher products than those that are close to their expiry date.
So, whenever you’re setting up the racks, make sure you put the products (that are closer to the expiry date) in front, so you can let them go sooner.
Set inventory par levels
As mentioned earlier, every product has a certain demand and understanding that the level of demand is important. After the first couple of weeks, you should understand the demand for the product and use that data to set an average par level. Any time in the future, the products dip below the average, just make a small order that’s enough to meet the demand. Make sure you don’t make a large order and end up struggling to sell the product.
Organize your inventory
Organizing all your stock with labels and keeping a record of when the products arrived and they expire is really important. The best way to maintain records is to organize your inventory accordingly keeping an account of the same. It also allows you to understand how you should store some items that remain fresh under certain conditions like temperature, exposure to light, etc.
Inspecting your shipments
Going through every shipment allows you to make sure that you don’t receive any subpar products and avoid the issues they can create. When it comes to perishables, you can easily come across a bad apple in the bunch but that will only happen if you keep an eye on everything. Because, as they say, one bad apple can spoil the bunch. In this case, it will be your whole lot of inventory.
Besides this, you should also make sure that you have insurance that allows you to make such transactions without incurring much financial loss.
Remember, in the end, only the smart ones survive! So, invest in insurance and always be prepared!