Starting and maintaining a company that carries a lot of inventory is an investment. You are sticking your neck out and counting on the fact that your products are what your customers will be looking for. You need to figure out how you can swing that initial investment and then the steps to take to set yourself up for the most success in selling that product. Here are a few things we have learned that you can consider when making inventory planning and purchasing decisions for your company:
Do you have the proper paperwork and coverage?
Do the research.
Your company was created to target a specific type of consumer. Who is that? Having that focus and then doing the research on them is crucial. Purchasing inventory without thinking about this customer’s preferences and needs will kill your business. It is not about picking all of the items that you think are “pretty” or “super cool.” You need someone who is going to be willing to buy them (other than you when you purchase them as your inventory). You also don’t want to buy a ton of inventory that won’t be in the general price range of your target persona. Sometimes people will splurge, but what do they feel comfortable with on a regular basis? Repeat customers are an awesome. Make that a possibility with prices that they can afford, an experience with your company that is positive and the type of product they are interested in.
Is your business seasonally based?
Are you a start-up fashion line or ecommerce boutique? That industry, as an example, runs in seasons. You need to make sure to keep that in mind because seasons need to be planned for months ahead of when they will actually arrive to you or anyone will start wearing them. You need to be up on the trends and always thinking about what is next. We also bring this up because you want to think ahead. If there is only so much money you will be able to spend in the next year (for certain, not based on potential sales projections), make sure you leave room for purchasing for future seasons. Don’t blow everything stocking up for next spring and then not have money left over to stock up for the next fall season.
Do you have a plan for arrival?
Whether you are producing your own exclusive line or ordering someone’s (or multiple people’s) products, it has to go somewhere once it arrives. Do you have your own warehouse space that you plan to store it in? The investment in the space is yet another cost you will need to keep in mind for your overall budget, but the amount of control you will have over the inventory and manner in which it is sent out to your customer is definitely a perk. Need to figure out some sort of third-party fulfillment solution? Do your research and make sure that they are organized, have great tracking systems, adequate turn-around times and care about the manner in which they package your product. Read reviews and ask around for suggestions. If you customer has the experience of something that is sloppily packaged, not what they ordered or takes forever to arrive they will not be happy. They may never come back. Make sure you can trust the fulfillment service’s commitment to your company and brand.
Whether you are storing in-house or elsewhere you still need to have a plan for inventory arrival. What am I talking about? Well, you need to think about:
- SKU Systems: You will want to make sure to have a consistent plan for your inventory. Will each brand you carry have a certain number or letter combination? Each category of product? Each size? Think about the different variations and how you can consistently assign a naming/numbering convention to each of your products so that you and your team (or the fulfillment company) can clearly recognize and track what those numbers mean in terms of the product they can expect that SKU to represent.
- Inventory Management System: Once that is established you will need some sort of program to track that information for accounting and inventory level tracking purposes. We have used a multitude of programs including Epicor, Quickbooks, Smart Turn and Stitch. Ask your accountant for advice and see if any integrate better with your other systems, like your website or any existing shipping programs you use. The more organized you are with this all along the easier it will be to pull reports on how things are going or come tax time. This will also help if you have a business where it would be important to track when inventory levels are low on certain items and need to be re-ordered. Most good inventory management programs allow setting custom monitoring of levels to alert you when this occurs.
- Shipping: This one is multi-faceted. You will need to decide on a shipping system. You don’t want to waste your time manually going to UPS, Fed Ex and other such sites to compare pricing and eventually create a label on one with each and every order that you ship. Using a program like Shipstation or Shippo will automate that process and link up seamlessly with most popular website platforms you may be using. Don’t add the extra hassle and headache. Make sure you are covering your bases on your shipping settings and policies and you won’t have to worry about shipping costs. Speaking of shipping costs…do some research on what others in your industry are doing. Establish your initial shipping policy and pricing off of that. Re-evaluate if you find that those numbers aren’t working once you actually put them into play. Will returns be their expense, but exchange labels come from you? Finally, you need to make sure you plan for the proper items to actually fulfill those orders (or make sure that your fulfillment company has what they need). This may mean everything from a multitude of boxes, envelopes and tubes, bubble wrap or other packaging material, tape (clear or custom to your brand), a label machine and labels, polybags, heat sealers, etc. Make sure the presentation of your product shipping out is professional and that the product will arrive safely with well-planned packaging options. Will you need to stock up on lint rollers, certain cleaning products or steamers to make sure things are looking top notch before they leave your facility?
- Manpower: Do you have the required manpower to do the physical inventory and then fulfillment as the orders come in? Is it best to go with a fulfillment company, like mentioned? Will you need to bring in some sort of temporary help when you know large shipments have arrived and need to be gone through and organized? It is important to inspect items coming in that you purchased from another vendor to make sure you got exactly what you ordered and that their was no damage. You will want to account and plan ahead so that you can get your products processed, photographed and up/out for sale as soon as possible.
- Physical location, online or both?: Where will your product live and how will people find it? Will it be a combination of things? Need to think about how to build a new website to showcase it (see below)? Or do you need to figure out how to display it as a section of someone’s retail location or one dedicated solely to your own offerings? Going to do in-person events like tradeshows or fairs?
Marketing your new inventory.
So the product is here and has been gone through…now what? Now is the time you need to start thinking about photographing it, or hiring someone to do so and get it online or out there in some shape or form. This likely needs to be a combination of lifestyle shots and product shots. We can help with this strategy for your specific industry, but you can read more detailed examples of product photography and lifestyle photography as it relates to fashion-based sites in some of our recent blogs. You can likely draw some inspiration regardless or your product line from these examples. Executing your photo shoot well by careful planning and photographer vetting is important. Don’t spend the money on the inventory only to poorly represent it.
Now is the time to take that beautiful new imagery and execute it onto your existing, or new website. Make sure that this photography accurately gives your customer an idea of exactly what they are buying. Pair that with well thought through and detailed product descriptions that are peppered with keywords targeting your audience, while crafting a powerful message that gives your customer a better idea of the item. Your website also needs a to be set up to deliver a favorable user experience. Is the navigation clean and makes it easy to get to exactly what your customer is looking for? Is your website mobile-friendly, meaning that your customer’s experience of your site will be great on any device they may be viewing it on? Do you have custom filtering options to help customers sort and find the type of product they are looking for more easily? Is there some sort of size charts you need to make sure to incorporate? You want to make sure that your website boasts a professional and secure checkout experience and clearly spells out shipping and returns policies. Are there related products that you want to feature within product pages to encourage the purchase of multiple items? Those are just a few of the things that an experienced web design team should go over with you when strategizing about your new ecommerce website design or rebrand.
Are there other collateral pieces or forms of digital advertising where you would like to highlight your new inventory images? Direct mail, hangtag signs or flyers can all be professionally designed and printed. Buttons and banners can be designed and ran on sites where your target shoppers are likely to frequent. You can work with a team or within your own company to develop a strategic content plan that utilizes a well thought out keyword strategy that you can consistently implement throughout your blog and socials.
This list is just scratching the surface of some things we have learned when launching several of our own inventory-based businesses and helping our customers successfully do so for their own brands. Want to talk more about your overall business strategy and how we can use what we have learned from our successes and failures to help your business grow? Contact us today!