Inventory management for small business is essential to increase efficiency and revenue. This is especially true for boutiques. These 6 tips can help you improve your inventory management when buying wholesale.
You have goals as a small business owner that includes managing your inventory better to improve customer satisfaction and retention, and of course, increase profits. Those are worthy goals but are often easier to write down on paper than implement, until now. Having customer-first goals like this means you have the potential to rock the retail industry.
Wholesalers have similar goals. They want customers (you) to be satisfied; place reorders, and, of course, increase their profits. If you succeed, they succeed. One way wholesalers can help you succeed by tweaking the inventory purchasing process.
How you buy inventory from a wholesale clothing company can influence how you manage inventory in your retail business. Wholesalers know this and want to help. We’ve provided some insider tips below. But before we get to the how let’s focus on the what. It’s essential to be on the same page when defining inventory management for small business clothing retailers.
What is Inventory Management for Small Business?
The simple answer, it’s the process of ordering, storing, and using or selling products. For clothing retailers, it means sourcing places to buy clothing, deciding how much to purchase, making the purchase, storing the items upon receipt, and selling them to your customers. It means doing all of this with the least amount of damages or losses and the most profitable margins.
If you can succeed at inventory management, your small business will have the edge over competitors. Knowing how to buy from a wholesaler plays a significant role in giving you this edge. So, let’s get to those tips.
1. Build a Relationship with Your Wholesaler
Building a positive relationship with your wholesale team gives you many advantages. The more your wholesaler knows about you and your business, the more they can help you in the buying process. A good relationship may help you get inside tips, discounts, and special sales. Wholesalers can help you cut costs on fees when it comes to shipping.
They can even notify you of industry trend news that comes down the line from manufacturers. These are things wholesalers don’t have to do but may want to do because you have a great relationship.
2. Take Advantage of Small Batch Ordering
Some wholesalers provide small-batch ordering to help small retail stores prevent overstocking. It enables you to avoid big losses on products that don’t sell. When buying wholesale, buyers must purchase a minimum number of items to get the discounted cost. For example, a wholesale company may require you to buy 25 of the same t-shirt to get the shirts for $5.00 each.
Small batch ordering is simply a reduction in the minimum order requirement. So, instead of requiring you to buy 25 t-shirts, you may only have to buy 5 or 6. Small batch ordering can be used as a test run to purchase larger orders at a discount. Understanding the best ordering process for your needs is important for efficient inventory management for small business boutiques.
3. Take Advantage of Price Cuts for Large Batch Ordering
If a product is selling in your retail store and you keep running out of stock, consider buying the product in a larger batch. Wholesale companies offer larger discounts as you increase the number of products you buy. They make more money by selling in volume so that they can give you better deals too.
The key to both small batch and large batch ordering is to understand your customer.
4. Don’t Be Afraid to Ask
Wholesale companies are eager to answer your questions. It allows them to prove why they are the best option for buying in bulk. How they respond to your questions will influence your decision to buy.
Don’t be afraid to ask questions about the item’s quality, how the item has been selling for other small businesses, and which items the wholesaler recommends based on their sales.
Before you start asking for favors, though, make sure you know the actual costs and the lingo. Also, make purchasing deals that are creative and show how the wholesaler will benefit and save or make money.
5. Create a Delivery Schedule
Working with your wholesaler to create a delivery schedule based on your small business needs can save you money. You won’t receive too many products at once and be forced to pay for storage. Delivery schedules help you know when old products need to be marked down and sold before the new products arrive.
Also, delivery schedules can help you with product placement in your retail store with FIFO and LIFO inventory management for small business boutiques.
- Using the FIFO (first in, first out) means you will sell older products first to avoid losing money when the products go out of style or trends change.
- The LIFO (last in, first out) method is typically used for seasonal items based on current prices.
6. Pick the Right Wholesaler and Be Exclusive
Finding the right wholesale women’s clothing company means doing your homework, reading reviews and testimonials, talking to references, and spending time talking to staff at the wholesale company. You are looking for a wholesaler that sells quality, popular products that your customers will love. They have integrity and offer a contract that benefits both of you.
If you can find a wholesaler that meets all, or most, of your needs, approach them with an exclusivity proposition. Meaning, you agree to only buy products from them, and in return, they give you a better discount.
Finally, be a great customer. Making payments on time, being loyal, acting professional are examples of what it means to be a great customer. Also, practice good communication skills, work together to problem-solve, and show a sincere interest in collaborating so that you both benefit.
It’s traits like this that encourage wholesalers to help you in the processes of buying and inventory management for small business clothing retailers.