Inventory is the amount of products that a business owner has in stock for customers or clients who may be looking to purchase some items. Many business owners will have a large inventory, due to the fear of disappointing a customer who is desperately looking for a specific product. The importance of inventory is not just so you can be prepared for your customers, but also so you can become a reliable business.
Know What You Can Offer
Having an inventory in your business means that you know what you can offer your customers when they need it. For example, if you always have 10 copies of each product you offer in inventory, you know that you can always give the customer what she needs when she needs it. This reliability creates a sense of credibility from the customer, as the business appears to be well-organized and maintained from the customers’ perspectives. Not having something in stock can cause customers to find another business or supplier. This means that you lose a potential customer, because you did not have an inventory of products readily available.
Having an inventory can save your business money if you have products shipped to you in bulk orders. For example, if you run a business where you need to order on demand as customers need it, you need to pay shipping each time an order is made. On top of that, the customer will have to wait a period of time before the product arrives at your business. Having an inventory allows you to save money on shipping, as you can ship several copies of a single product at once and give you customers the product immediately after purchase.
The two previous sections benefit your business and its credibility, but none of that would be possible without the customers that judge your business based on its overall performance. Since your customers and clients are the ones that keep your business active and afloat, it is important that your goal is to satisfy their needs. Having an inventory gives you the opportunity to save your customers time and money. This satisfaction may give you some indirect marketing, as people’s joy with your business may be shared with friends and family.
What you have in your inventory is considered a business asset. An asset is something that the business owns and is part of the equation when calculating the overall net worth of the business. The net worth of the business is the result of the given liabilities subtracted from the total assets owned by the business in question. If you have a large amount of liabilities in your business, having a business inventory can be an asset, which may level out your business’ net worth.