How much starting packaging inventory should I have to make sure my operations go smoothly?
This is often a dilemma for practically every business since inventory costs money, but running out can result in loss of sales, especially if a large order requires speedy delivery.
The inventory question is much more challenging to answer during the start-up stage of your business. Many methods exist for determining inventory and many rules for clearing out stale stock, but applying them requires experience. And experience is something your startup currently lacks.
And, if you're like most new businesses, you've got a lot to do with a limited budget, so you would not want to tackle the inventory problem by playing safe and overstocking.
How To Keep Track Of Your Packaging Inventory
When shipping your products, you should track not only your inventory but also your shipping supplies. Neglecting to do this may result in your packaging material becoming a source of waste and causing cost duplication.
You will require tracking systems to resist the inclination to overuse crates, boxes, shrink wrap, bubble wraps, equipment such as staplers, dispensers, and shipping labels. Since you order shipments of finished products and raw materials separately, it is straightforward to track them.
Use invoices from suppliers to keep track of the number of packaging supplies you've ordered. However, they do not give you the number you have in stock. They can't inform you of the number you have used and the number you are left with. Likewise, you can't use the cost of supplies since prices may have increased by the time you use this information. Instead, it would be best if you worked with the quantities listed on your invoices.
2. Annual figures
Conduct an inventory of all of your packaging materials at the start of each year, and then take another inventory at the end of the year. If your 12-month total is higher and you've not been shipping as many products, you may be buying too many packing supplies.
One case to keep an eye on is when you see you're purchasing fewer packaging materials yet sending them to consumers late. You could be delaying shipment because you don't have adequate materials. On the other hand, if you have less inventory at the end of the year while keeping your shipping levels the same, you know you've done an excellent job of reducing waste and over-ordering.
What Are The Basic Ways Of Controlling Inventory?
Here are a few of the most common methods for keeping inventory under control:
- Use an inventory control system with software that is appropriate for your company's size. QuickBooks is one of the most well-known systems, although there are many more. This is a choice you should make with the assistance of your bookkeeper. Whatever system you choose, you and everyone in the business will have to become experts in it.
- Once you've established a track record, you'll want to fine-tune your forecasts.
- Identifying low turnover stock is a standard measure for inventory management. According to the Pareto principle, 20% of your sales will account for 80% of your total sales. When you gain more experience, you will be able to learn and apply this skill.
- With software that tracks incoming inventory and sales, you can easily keep track of your stock in real-time. You can make resupply orders automatic when inventory sells down to a particular point if this system delivers the required feedback.
- Reducing supplier lead times allows you to acquire new inventory closer to when you genuinely need it. However, make sure that your supplier can meet the given delivery deadline.
Bear in mind that, no matter how well you manage your regular inventory requirements, the onset of the festive season will almost certainly necessitate a different strategy and calculations. In the weeks leading up to the holidays, many companies conduct a shockingly big portion of their yearly business. Being low on inventory creates a two-pronged problem.
During the holiday season, your suppliers will be under the same pressure as you are, and you cannot sell what you don't have.
Getting the Right Packaging Pouch Inventory
Here at Pouch Me, where we design and manufacture bags, we witness startups struggle with these issues all the time. If your product necessitates packaging, then there will be no sales without packaging.
Furthermore, creating the correct package safeguards the quality of your products (freshness, moisture protection, and other vital factors). Still, it is also critical to successful marketing and, in particular, the 'point of sale' value of your product.
Just do your best at planning and budgeting as a startup, but you can do it even better with support from your accounting, sales, and marketing colleagues. How many bags do you have to sell based on your financial goals for the first month, six months, or year?
Your company may not yet have a track record, but other companies of comparable size and similar selling products in your industry do, and you may apply what you've learned to your case. There are local organizations like your Chamber of Commerce, as well as hundreds of internet forums where small firms of all kinds, in all fields, frequently exchange information and work out difficulties they all confront.
Additionally, your salespeople and advertising strategists are likely to have objectives. Are they pursuing large-scale orders from potential buyers? What do they think the chances are? Will you have to wait a long time to deliver since your packing isn't ready if you receive those accounts?
Considering Lead Time For Production and Replenishing Inventory Stocks
Lead-time is important in many ways. If possible, avoid paying a premium for urgent orders when ordering your packaging or other products. The majority of suppliers, including yours truly, have many orders to satisfy. Don't get us wrong: the provider needs your business. This is why at Pouch Me, we make every effort to meet delivery timelines, but we also want and strive to do right by our current clients.
Allow our skilled and experienced staff to work with you to determine an order lead time that is neither excessively long nor unreasonably short. After all, we do not take packaging lightly, and so you shouldn't.
We recommend scheduling an early free consultation to provide enough time for creative design related to your unique needs, careful production and quality assurance, shipping, and any adjustments you might want to address after receiving your order.
Stop Guessing, Talk to Professionals, Get Going
Moving forward doesn't need to be difficult. We are here for you every step of the way. When you contact us, you speak with a real person at any time.
The consultation session is free and complimentary, as is our online price quote, and we are available to speak with you anytime you are ready. Inventory management, sale effectiveness, and supply chain issues never change, but how you choose to address the issues can change. We want to talk about how we can assist you at any step of your company's development, from startup to maximum growth.
- Pouch Packaging Inventory FAQs -
What is inventory?
Inventory is the accounting of goods, components, and raw materials used in manufacturing or sold by a company. As a business, you conduct inventory control to ensure that you have adequate goods on hand and recognize any shortages.
Is packaging material part of inventory?
If your packaging is what you would include if you are to display your product on a shelf, it is considered inventory.
How do I track my packaging inventory?
If you supply from multiple locations, using a computerized inventory control system at the distribution hub is the most effective way to keep inventory. With basic software such as Quickbooks, you can enter what you have on hand and track all distributions and reorders from your distribution center.
What are the four types of packaging inventory?
The four types of inventory are maintenance, repair, and operating supplies (MRO), work in progress (WIP), raw materials, and finished products.