April 2018 – Idezi Blog

In the early 2000s, poor inventory management made Nike lose sales worth approximately $100 million.

After the debacle, Nike’s stock price tumbled by 20%, was hit by various class-action claims and became the embodiment of poor decisions.

Luckily, Nike was able to rebound by implementing a better inventory control management system.

If this can happen to Nike, one of the world’s biggest companies, it can also happen to you.

We’ve compiled 6 common inventory management blunders many companies make and the potential solutions.

Failure to Forecast Demand Accurately

Nike’s problem arose from an incorrect forecast demand. The bugs and errors in its software produced the wrong forecast, which they relied on in the manufacturing plan. Consequently, they had less of the items that their customers demanded and produced too many items that weren’t sold.

First and foremost, inventory management systems must be bug and error-free. Demand forecasts are crucial for producing the right quantity of products and if the figures are inaccurate, you’re doomed, especially if you’re operating a wholesale business.

The answer is pretty simple: you must get an inventory tracking software that produces accurate data.

You Aren’t Automated

If you’re currently tracking your stock with Excel or another manual process, you’re wasting valuable time and money by correcting errors one at a time or sifting through papers.

Mistakes are inevitable. Research indicates that even a skilled data entry worker will make one mistake for every 300 characters they enter.

That kind of inaccuracy may cause huge problems if your stock consists of thousands or hundreds of products.

Manual processes don’t allow many people to access them at once and don’t work in real time.

In contrast, an automated system allows several employees to track products across a number of locations, all while keeping tabs on shipments and orders for those products.

Your Employees Don’t Have Inventory Control Skills

No one has time to stop operations for whatever reason, never mind training. However, to have proper inventory control, you need employees you can trust to perform the task well.

While you prepare to set up a better inventory management system, consider these suggestions to prevent frustration for your workers and you.

Hire the right staff: Your business probably has inventory worth several hundred thousand dollars. Shouldn’t you engage the services of experienced inventory managers or individuals with a solid track record in inventory for starters?
Put emphasis on training from the beginning: Many inventory management system vendors will train your employees on-site. Make the most of this chance. The training is usually tailored to your business, and everybody will be learning about the best practices from day one.
Hold your inventory managers to account: Do you know who manages inventory in your storehouse? It’s vital to have someone you trust and who knows and totally backs your strategic goals. Otherwise, you may never achieve your goals.

Less Frequent Inventory Inspections

Many companies halt operations for one day to inspect inventory. This can lead to loss of profit. It’s much worse for large companies with plenty of inventory; they may end up with loss of profit for several weeks.

This is a dated method that’s also not at all productive. You’re better off planning more frequent inventory checks to avoid halting operations and not making sales.

On top of that, even if you notice a discrepancy while checking your inventory, it’ll be hard to pinpoint the issue when you’ve got 3 to 12 months to remember.

With an online inventory control system, you won’t need to do that. A reliable system will keep you informed about the state of your stock in real time.

Apart from stopping the loss of profits, this will also enable company sales reps–with more clarity and visibility on inventory levels–to speak with more confidence and conviction to prospective customers.

Your Warehouse is Disorganized

Disorganization is the bane of efficiency and productivity. There’s a massive difference between a warehouse that performs optimally and one that just functions.

Warehouse management is often overlooked in the chain of distribution, and seemingly innocent mistakes–like badly labeled storage areas–may waste a lot of time.

Time is of the essence in the distribution process. If your employees have to constantly crisscross the warehouse looking for incorrectly stored and poorly labeled items, the losses accrued eventually can be punishing.

Use a simple, clearly-marked labeling and storage system. Put the most in-demand products and those picked most often in areas near the loading bays.

Foster effective data-based communication between departments to ensure that every process in your distribution chain (from buying and sales) is running from one page, using accurate, real-time data.

Although there’s no fail-safe protection against all the problems that can attack your inventory control system, avoiding the three main pitfalls mentioned above will ensure that you have proactive control of your inventory.

Selling More Products than Those in Stock

If you’re operating an online shop, you’ve probably sold more goods than those in stock at least once.

Customers have made orders and probably even paid for them. Come delivery time, it dawns on you that that specific item is out of stock and it’ll take some time to restock it.

You’re then left with the tricky task of letting the customer know that their order is going to delay and having to reimburse them in case they no longer want the product.

This wouldn’t have occurred if you were utilizing an online inventory management app to monitor incoming and outgoing inventory.

If it happens a few times, your previously devoted customers may decide to purchase from another online dealer that uses a better inventory management solution than yours. Therefore, your customers and revenue will shrink and you’ll have it all to do to restore your business to its glory days.

Inventory control can be quite a challenge–but there are certain things you need to do to make it easier.

Are you about to start selling your own products?

Then you’ll need to know exactly why product labels are so important.

It may seem surprising, but the right product labels can actually make or break your business. No matter how great your product is, many people make purchasing decisions based on visuals. Without the right look for your labels, people will pass right by your products without a second look.

Luckily, it’s easy to design great product labels that will help you make the sales you really want. In this guide, we’ll break down exactly why labels are so important, and how to design the perfect labels for your brand. Keep reading to learn more!

1. Show Your Ingredients

If you’re selling a product that’s edible, or maybe a personal care product like makeup, your customers will definitely want to know what’s in it. Your product labels should make your ingredients clear and easy for customers to read.

If your high-quality ingredients are an important feature of your brand, you can even highlight that fact on the label. Maybe your brand avoids dangerous additives that big-name brands use. Make that clear on your labels, and you’ll be sure to catch the attention of new customers.

2. Give Appropriate Health Warnings

Even high-quality, healthy products can be dangerous to certain customers, such as people with allergies to one of your ingredients. When you add the appropriate warnings to your labels, you can protect both your customers and your brand.

The last thing any small business needs is a lawsuit from a customer who was harmed by a poorly labeled product.

However, a good label can help legally protect your business. This also shows that you care about your customers. Even if a customer doesn’t sue, you can still avoid the bad reviews that come from unhappy customers.

3. Provide Directions

Does your product need a how-to component?

Answer common customer questions and make your product easy for customers to enjoy by adding the right labels.

If you notice customers frequently have a hard time figuring out your product, use the label to provide the information that will improve their experience. The right directions help ensure customers enjoy what you’re selling. You don’t want bad reviews simply because someone was using your products wrong.

4. Highlight Savings

If your product offers a great deal for the price, you can use your label to highlight its value. And if your product costs more than the competitors’ products, but is worth it for other reasons, you can also use your label to give customers the information that will help you make the best choice.

For example, maybe you’re selling a brand of dog food that costs more than mainstream brands, because it uses only whole, natural ingredients. On your label, you can highlight some of the benefits these ingredients will provide, such as improving a pet’s health. Customers will know that buying your brand will help them save money on vet bills later on.

5. Target Your Demographic

You probably want a specific group of people to notice your product – the people who are most likely to buy it. With your label, you can use design to target that specific demographic.

For example, if your product is aimed at teens, use colors and imagery that will appeal to them. If your product is aimed at senior citizens, on the other hand, you might use a more conservative palette and simpler images to get their attention.

Even the wording on your label helps you reach the right audience. You can use font and color to your advantage here, too.

6. Dress up Inexpensive Packaging

As a small business, you probably don’t have a big budget to devote to packaging. However, a great label can make the packaging you have seem much more attractive, even if it was cheap.

The right colors and a stylish font are all you need to make your packaging look sleek and stylish. With a great label, many people won’t even notice that you used your packaging to save money.

7. Offer an Experience

A great form of branding uses packaging that creates a seamless product experience for the customer. Opening the package doesn’t have to feel tedious – it can become an exciting experience.

A prime example of experienced-based marketing is Apple products. These electronics are known for being sleek and user-friendly, and that’s reflected in the packaging as well. From the moment a customer starts to open up the package, they feel like they’re already enjoying their new product.

8. Save the Environment

If your product is eco-friendly, or your packaging is, the product labels are a great place to highlight that. Many customers choose eco-friendly products as often as they can, so this can become a great selling point.

You might be surprised to learn that 52 percent of customers around the world consider environmental and social impact as part of the purchasing process. You can make an eco-friendly product, but if your packaging doesn’t highlight it, your customers will never know.

9. Meet Industry Standards

There are a number of industries in which you’re required by law to print certain information on your label. For example, expiration dates and safety instructions aren’t necessarily just a courtesy to your customers – they might be legally required.

Your label not only gives you the chance to meet the legal requirements, but it also gives you a space to present certain information in a way that’s playful and fun. For example, if you sell shampoo, you might be required to provide instructions about how to use it on the label. But you can do so in a way that will get a laugh from your customers.

Do Your Product Labels Make the Grade?

As you can see, product labels are crucial to having a successful brand. Are yours up to par, or do you need to print some labels that will bring in the clients you really want?

We can help you design the custom labels you need. Contact us today to get started.