4 Inventory Management Mistakes Too Many Startups Make – AllTopStartups

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Startups have to learn a lot in the process of starting their business. Operating one isn’t easy, so you’ll need to back yourself up with as much knowledge as possible. Whatever field your business is in, the competition is always tough. To survive the water, you’ll want to start by learning from the mistakes of others. Sure, you’ll have an idea of ​​what to do as a startup, but it’s practical to have an idea of ​​what you shouldn’t.

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One of the aspects where mistakes are commonly made is inventory management. If your business is not able to get the products to the customers on time then your business cannot flourish and grow. Or, worse, you can’t meet the order’s demand. Without good inventory management practices, eventually, you will have one unsatisfied customer after another, which will adversely affect your business. This is not a situation you would like to experience, especially not as a startup. For those reasons, a prudent startup entrepreneur like you will learn to manage inventory in the best way possible to avoid making those mistakes.

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This article will take a look at some of the most common inventory management mistakes startups make, so that you can avoid making them as well.

Focusing only on the purchase price

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Beginner entrepreneurs may focus too much on the purchase price as a deciding factor in which supplier to order from, and they forget that there are other important parameters as well. You can’t just say that you are going for supplier A because they have the cheapest price. You have to take a holistic approach to it, balancing all the other factors. Only then can you say that you have found the best supplier to meet your inventory needs.

For example, pay attention to the following:

Supplier Lead Time. In other words, the time it takes for the supplier to ship the order from your warehouse to your store. If the lead time is too long, you may risk having little or no supply in your store, especially during peak season. Supplier flexibility. This means that your supplier is sufficiently resilient to changes in your inventory level or demand. For example, you ordered 100 units of Product A for January. Fortunately, it sold well; Before the month was over, you had to order 300 more. It may not be your agreed initial order quantity of 100 units per month, but your supplier should be flexible enough to meet that change and increase in demand. Supplier’s credibility. This refers to your supplier’s overall reputation as being professional and of the high quality in their service and the quality of the products shipped. leaving inventory checks on for too long

No matter how confident you are that your inventory or supplies are still in order, you shouldn’t leave the inventory check too long between each checking. Doing so will only run the risk of correcting even bigger mistakes in the future. They could have started small and it would have been easier to deal with at that time.

Take it as a good thing when you don’t see any problems during those checks. But don’t make that reason enough to give up on the next one. Supply chain can be unpredictable sometimes, especially as a startup, so you can’t let your guard down. It takes a few years before you finally understand that you have the most demanding months for certain products, which have the lowest, and so on.

In addition, pushing all inventory checks to a major event can affect your team. As a startup, you might not have that many members of your workforce yet, so you have to be careful not to let tasks pile up. It is better to break them into small pieces so that your work does not stop.

Too much focus on manual management

As a small business, it is normal to think that you can manage everything manually, on Excel, and through writing. Technically, this may be true, especially for the first few months. Since you are still making your business famous in the market, it is expected that the flow of products from your store and warehouse is not so fast. There are some days when sales are few or none at all.

However, don’t wait until it becomes too difficult to handle before considering switching to an automated inventory management system. Even if you’re still in the startup phase, it’s already worth automating. That way, you can already learn the ropes of an automated system. When the need arises, the transition period is smooth.

Moreover, automation is the best solution to avoid many human errors. Using manual sheets and formulas can be very laborious. If you still have a small team, there’s a lot to do on their part. Then, add to all that work the time you now have to spend fixing them. This could have been avoided to a great extent if you had started with an automated inventory management system earlier.

having out-of-date or incomplete product catalog information

This fourth mistake is probably one of the worst inventory management mistakes that can ever happen: having outdated or incomplete product catalog information. This goes hand in hand with the need for regular checkups. During those checks, you can also check your records and catalog to see if any product information should be updated.

To do your inventory management thoroughly, it is highly recommended to have a product catalog for active products and a second product catalog for obsolete ones. This is also where automation begins, as you will benefit greatly from having a centralized repository of all that information.

A product catalog makes all the difference in making your inventory management system more streamlined and efficient. If there is a change to be made, don’t wait to input what needs to be done later.


If your startup is in the business of selling goods, you will know that inventory is your lifeblood. Without a good inventory management system your operations will be negatively affected. The above list of mistakes should not scare you when you start a new business. Instead, it should serve as your guide not to fall into the same trap. Remember that inventory management is much more than just stocking the right amount of products on your shelf. There is much more involved, so learn, research and keep yourself well informed about the latest inventory management and the supply chain as a whole.

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