Inventory is the product, service, and the merchandise that the SME in India holds to sale to make profits. And inventory management is the right over the products and services for sale. As the SME owner knows that inventory costs a lot for the business. So, managing it effectively can perk up the revenue and reduce the cost of carrying excessive inventory, This way, sales will also be increased.
So, to make more profits, inventory management is important. Let’s take a look at some techniques that can help SME in India to manage inventory and earn more.
One important aspect of growing and managing SME in India effectively is optimizing the supply chain. A supply chain is a network in which the business and its suppliers are involved. It is important in the creation of the product and its sales. If an SME owner manages the supply chain effectively, he can successfully reduce various expenses and increase revenue and profits.
For the SME owners who wish to manage their supply chain efficiently, they first require to build a strong relationship with the suppliers. Simply put, they have to ensure that their end product is transported to the end user. And for that, the SME owner must be on the top of the processing payment and managing stock.
Notably, optimizing the use supply chain is imperative for the SME to grow and expand. The SME owner can also use supply chain management software for this. Such software will help in tracking shipment and managing logistics. They will also help in understanding the relationship with a supplier in a better way.
Diversifying supplier base and looking for suppliers from all over the globe is another way to using the supply chain effectively. This will help in reducing the dependency on one supplier as he may backfire on any occasion. This will also open the doors to the global market for you. You can explore it and your SME in India can further prosper.
You can also explore drop shipping. In this model, first, the order is fulfilled. And it is only shipped by the supplier when any customer places an order or request. This will help in reducing inventory cost and also help in expanding the SME in India with a wide range of products to sell.
Importers, manufacturers, regional distributors, exclusive distributors, and brokers are the 5 types of wholesalers. Your business model will help you to decide the type and kind of wholesalers you will choose. Having said that, in most cases, the wholesalers take care of the logistics and its delivery for you.
A wholesaler who will work with you and supply you the required amount of inventory and also play a role in helping you to better manage your inventory is the right wholesaler for you. However, we would suggest you run a background check on the wholesaler. This will help you to finalize the dealer who will provide you inventory on time without any interruption.
The success of your SME in India will depend on how you strike a deal and save money with the wholesaler. Your relationship with the supplier and wholesaler is your biggest asset. It also ensures that it is a win-win situation for your SME in India. You can achieve this through open communication.
You must also keep the credit terms clear for open communication. In addition, you must also pay all your suppliers and wholesales on time. This will help in maintaining the cash flow. And you can also keep the merchandise and inventory moving to keep your business grow and expand.
also read: which are the best business loans for smes?
Inventory optimizing is important to manage it. You can assess the exact inventory you require. It is important to not to buy any unnecessary inventory. Else you will incur unnecessary storage costs. Also, any less inventory may create delays in meeting the customer’s order. Inventory management can be effectively done through various inventory management software. They will simplify the entire process and also minimize the costs which will maximize profits.
Inventory is the life of every SME in India. Therefore, it must pay special attention to it. It must track and analyze the inventory. It will also improve the revenue of the SME.