Sales Forecasting and your Inventory Management System

Using an inventory management system can create a number of opportunities for you to better understand your small business. For example, finding the right balance of stock to keep on hand is vital to maintaining profitability. If your stock runs out in a high demand period, your customers are going find what they need elsewhere. Conversely, if you are overstocked, the money and effort spent to hold your inventory is wasted. Some safety stock can help you through unexpected turns in the market, but how much is just right?

Sales forecasting can help. Though forecasting is inherently imprecise, going into any time period with a plan based on reliable data will improve your chances. Many of the key factors will be specific to the nature of your business. Are you dependent on the weather? You'll need to keep up with seasonal forecasts over time. Operate near a college campus? Keeping track of the when the student will be in town will be important. In any case, you'll need to know the major external factors in addition to how your sales performed during those times.

This is where on online inventory management system like Stockpile can help. See any item's performance, month by month with Instock and Quantity Sold charts. Also, use the Transaction Overview Report to see this information across your entire inventory for any time period. Armed with this data and your knowledge and experience with your local market, you can make more accurate predictions about where you need to increase your stock.

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