Running a business in Nigeria thrives on either products or services creating a need for itemization especially for product-led SMEs. Itemization calls for inventory management to serve as an infrastructure holding the business together for efficient operations. The question is, why should you prioritize inventory management for your small and medium-sized business?
The benefits of inventory management for businesses span stock accuracy, operation efficiency, scalability, customer satisfaction, better decision making and more. These and more are the benefits that an inventory management tool like LumiBusiness offers for businesses in Nigeria.
How do these benefits help you improve your small or medium-sized business in Nigeria? Lets match these benefits with your business to see the improvements you stand to gain.
Top Benefits of Inventory Management for Your Business
Improved Stock Accuracy
Several businesses which might include yours deal with products that are stocked up for sale after purchase. Inventory management contributes to improving your stock accuracy by keeping track of each item you have in store. An example of the impact of inventory management is how Jumia manages its stock levels and tracking of deliveries.
Jumia uses this method to know the stock level and supply rate across the multiple stores that they partner with. This helps improve customer satisfaction as they know if the products they are interested in is in stock, out of stock or being delivered.
Enhanced Operational Efficiency
Seamless operation is essential to run your business and inventory management helps to enhance your pre-existing system of operations. How it does this is by automating the hard and boring tasks, reducing operation time and adding more accuracy. In simple words, it allows you to get the exact information of your stock levels and organize them.
Taking Shoprite for example, they get product supplied and stock up faster because they have the detailed information of stock levels. The cashier section aligns with their stock to let them know what is and isnt available to keep the business running seamlessly. All these is possible with proper inventory management making it a great benefit.
Cost Savings
Another benefit of inventory management is the solution to the challenge which most SMEs face which is understocking and overstocking. Proper inventory management lets you know the stock level of each product that you have on sale with adequate details. What this means is that you get to know which products are running low or still fully stocked across your stores.
Knowing this detail means you won’t waste finances on overstocking a product or run the risk of getting understocked unnecessarily. The supermarket, Jendol, is an example of a business that keeps shelves across stores filled up with the use of inventory management.
Better Decision Making
Another important aspect of business is decision making and you can only do that by having updated information. So how do you get updated information and improve your business with what you have gathered? It is by incorporating inventory management into your business operations and that is the first step.
The benefits of inventory management for business go beyond knowing the stock you have across your active stores. It gives you real-time statistics and a timeline of stock demand and supply to know product performance. These in turn help you make better decisions either to drop some products, restock or implement better business strategies.
Increased Sales and Profitability
The aim of your business is to make a profit and that is closely attached to satisfying your customers and making sales. What this means is that you need to meet customer demands by having what they want, when they want them. In situations where you can get that exact stock, having a close alternative helps you maintain your profits and sales.
One brand that has done this and enjoyed increased sales and profitability from inventory management is again, Jumia. The Jumia brand uses inventory management to know which stock is available and present alternatives on their online store. Implementing inventory management the way Jumia does, lets you retain your customers and get even more profit.
Scalability and Growth
Growth counts among business success and for most SMEs, it comes in the form of expansion to different locations. However, more stores mean more work has to be done and it gets harder to manage the inventories of each branch. Inventory management takes these worries off your hands by bridging the gap in your operational system.
SMEs like yours can scale efficiently by organizing your stock across each branch into a single channel as Jendol does. Jendol uses inventory management to monitor stock levels across each branch in different locations. Implementing this strategy helps them keep each store stocked up, keeping sales at its maximum every single day.
Enhanced Customer Satisfaction
Enhanced customer satisfaction means one thing, the number of customers that are satisfied after purchasing from you has increased. It’s one of the benefits of inventory management for small and medium-sized businesses but how do you know this? You will notice an increase in sales and receive more positive customer feedback over time.
Inventory management helps you enhance customer satisfaction by helping you keep your stores stocked up for every sale. That way your customers get what they want and have you in mind as the store for their every need. Shoprite implements the strategy to keep their customers hooked and satisfied as they get what they want.
Compliance and Reporting
The last benefit of inventory management for businesses is audit reporting and regulatory compliance. Inventory management allows you to get accurate records of your stock, sales and more, in detailed reports for analysis. You can properly monitor your tax payment, and finances and get the report for each aspect for monitoring and decision-making.
Inventory management simplifies the process with efficient automation, allowing you to get all these details at the click of a button. So you don’t have to flip numerous pages and sit for an entire week to get a collation of the numbers you need.
That wraps up the benefits of inventory management that can help improve your small or medium-sized business. Inventory management brings you stock accuracy, improved customer satisfaction, operational efficiency and more but is that all you get from implementing this strategy?
The answer is no but you can only see the bigger picture by implementing it. What should you do next? Well, the next step is to take your business up several notches with inventory management and Lumi does this for you. So hop on this inventory solution software and enhance your business in Nigeria.
Need an inventory management to manage your business in Nigeria? LumiBusiness helps businesses like yours across diverse verticals to manage their operations and to scale.