According to some estimates, over a trillion dollars are lost globally due to inventory-related mismanagement. Maintaining the proper amount of inventory is crucial to guaranteeing the success of your business, whether you are just starting out or are already thriving as a company.

How can you avoid making mistakes in managing your inventory?

It starts with knowing what these common mistakes are, then identifying which ones you are making in your own organization, and creating a plan of action to eliminate them.

Common Inventory Management Mistakes

There are many methods and techniques to streamline your inventory management process but there are just as many errors you can make to jeopardize it. Are you making these inventory mistakes in your business?

1. You’re still relying on manual inventory management.

Some businesses rely on gut instinct or a quick count to estimate their available inventory. This is convenient, but it increases the possibility of human error. When you rely too heavily on a manual inventory management system, you should expect plenty of errors.

2. Your team lacks training.

Because inventory management touches so many different aspects of a business, chances are that more than one member of your team will be involved. It’s critical for success to have most if not everyone in your team to be skilled and experienced in business inventory management.

3. You depend too much on in-house resources.

Every successful business, especially eCommerce businesses, eventually comes to the realization that handling logistics and inventory fulfillment in-house makes no sense. Hiring the right experts can help you choose the best inventory technologies to invest in to manage your system more efficiently.

4. Your data management system is outdated.

By switching to an automated inventory-management system, you’ll get real-time data, so you’ll always know what your customers want. And when customers are satisfied, they will come back for more allowing you to earn more revenue rather than dust on all those things in your warehouse.

5. You don’t conduct forecasting.

A lack of accurate forecasting will result in a failure to meet consumer expectations, as well as a decrease in customer satisfaction. Monitoring inventory helps you plan proactively and know what items are in stock and what are in demand. Forecasting provides insight into what your consumers want, as well as what goods aren’t so popular. By knowing what’s not selling, you can avoid buying items you don’t need and accumulating too much inventory.

Effective inventory management results in enhanced operational efficiency, higher customer satisfaction, and significantly improved cash flow. Carefully reviewing your inventory procedures for any of the above-mentioned common mistakes and refining your system will not only place your business on a stronger development trajectory now but will also prepare it for future growth.

If you’re in the eCommerce industry and are navigating through the complexities of eCommerce accounting and inventory management, let real experts like eCommerce Accountant help you.