I still believe that every successful startup owner should have at least one failed attempt in his or her past to experiment with and learn from. Of course, we all start off hoping that that first idea was the one that was going to bring in the millions without knowing much about how to actually run a business. Observing your own mistakes and learning from them is a more effective strategy than reading a hundred articles on what to watch out for.
One of the problems I ended up facing after a few months of business operations (I had started my own online boutique at the time) was a basement full of unsorted piles of merchandise, a low and ineffective shipping method, a bunch of unhappy customers, flooding my social media profiles with complains and a ton of orders for exactly that one shirt that I had zero quantities of and my original supplier had closed shop for good.
Most entrepreneurs don’t start off as project managers or inventory managers or accountants turned visionaries (although a respectable number of them actually do, so, my apologies for the generalization). Usually a girl or guy with an idea rarely considers the logistics of running a business, but rather dive in developing the production designing the logo and website, and working on their social following and getting their product or service out there. The idea of testing your product by advertising without having an actual product to ship is quite popular today, but what happens when suddenly there actually is demand for it?
To avoid disappointing your customers with poor service from the very beginning and keep them waiting (one of the things customers particularly enjoy doing), is do a bit of inventory management planning from the very beginning. Here are some things I learned from my quickly failed online fashion boutique regarding keeping effective track of my inventory as a major point of providing client satisfaction and keeping my financials in order.
1. Don’t buy (or produce) too much of everything
If you have a large spectrum of products, chances are not all of them will perform equally well. Start off by offering (and advertising) limited quantities and perform periodical evaluations. Watch out for any spikes in sales and only then decide which products will form the front lines and start stocking up on them.
2. Don’t lose track of ins and outs
If you rely on your notebook or spreadsheet to keep track of what goes in and out of storage, it is quite likely that you will soon get it all mixed up. It’s even more likely if you are a one-man business. Nowadays there are so many innovations in inventory management that it pays off to invest in a modern solution such as carta or another tracking software, which offers free trial, so you can see if it’s what you need.
3. Don’t rely singularly on Plan A
Always have a backup plan, even when things are going miraculously well for you. What if all inventory spoils? What if you need extra storage? What if you don’t have the product you are advertising in storage? How will you handle return orders? The answers to these and a few more questions will form the backbone of your backup plan.