This is on How to reduce supply and inventory cost in a business

Inventory cost is a part of owing a business. If you don’t order them right, you will also lose a lot of money because you can have inventory not sell well or that they’re not worth the price you pay for. If you order them at the wrong time or too early, you can also lose money. If you order them from the wrong supplier, you can also lose money. If you order inventory that gets spoil or damage, you can also lose money. The ordering process is very important and it needs careful planning. This is why the top managers need to implement a lot of control in this process. You would learn all of this in management school.

You would also need to reevaluate your inventories every now and then so that you can discontinue poor inventories and order more sellable inventories. You do have to have your records for these. These are from your sales record. Obviously, you would order the ones that sell well and discontinue the ones that don’t sell. You would also pay attention to how people buy and what they buy and when they buy. You do need to do a lot of research from your particular store and apply it to your business. Every location is filled with different demographic that can change all of these factors too. This is when the top managers need to pay careful attention to it.

Of course, you can’t do one thing without the other in business. You would have to apply all factors together and this is when an experienced manager is needed. Experience is also very helpful when it comes to inventory. An experienced manager would know the hot trends and would know all the major pitfalls out there. If you have a new manager, you will need to train them well. If you make too much mistakes in ordering inventories, you can lose a lot of money if they don’t sell and if they are costly too. This is like ordering tons of Gucci sunglasses and no one buys them. You will end up losing tons of money and having to liquidate them for pennies.

Gucci glasses are great but not that many people can afford to buy them. When it comes to luxurious merchandise, you have to order with care. You can’t return them and you can’t liquidate them that easily either without losing a lot of money. You have to realize that the majority of the market can’t afford to buy luxurious items all the time. Inventory then should be a very special factor in controlling cost of your business. If you’re a major store, you can lose so much money if your ordering managers make many mistakes.