What makes a solution the “best” inventory software for small business?
Every day our sales and support teams get asked: “I’m looking for the best inventory management software.” It’s like that old saying, give me a dollar every time someone asks that question and I’d be a millionaire, and so on. Here, we’re going to show you an easy two-step process to help you answer that question. Of course, we’d love to say that EMERGE App is the best inventory management software but that’s up to you to decide.
We’ll start by answering why it isn’t productive to go around asking for the “best” this and the “best” that. Everyone will give you a different answer. Then we’ll cover the first step in our process: look at your business requirements. Next, we’ll help you identify software that meets those requirements. Finally, we’ll finish with a couple of almost-real-life examples to illustrate how the “best” software matches different businesses.
What Are the Best Things in Life?
Let’s say that you moved to a new city for a new job or business. And you start your housing search by telling your real estate agent: “Find me the best home in this city.” He or she is going to be slightly taken aback, a bit puzzled, but happy thinking of the supersized commission that they’re going to make!
But a professional agent is going to take the next critical step. They’re going to start qualifying you as a prospect. This way they’re going to understand your needs better, translate those requirements into a list of matching homes, and then start the viewing process to get a feel for the homes in person.
This step is important because it will help them increase their chances of closing the deal, whether you’re looking to buy or rent. Thus, they’ll typically start by asking: “What is your budget?”. Next up, broad questions like: “Do you want to live in the city or the ‘burbs?”. For a city location, they’ll ask if you like condominiums, warehouse lofts or townhouses. For the ‘burbs, they’ll want to know how many bedrooms you need, and so on.
By asking these questions about what you fancy, they’re helping you zero in on what you consider the “best” home in the city. If you insist on having an outdoor pool or a garage for your hobbies, then you’re going to focus on a large house in the suburbs. If you want 24-hour security, undercover parking and convenience, then high-rise living will do you just fine.
Step 1: Look At Your Requirements First
The previous example of house hunting is exactly the same for finding the best inventory management software for your business. Like housing, there’s no one size or unit that will please everyone. Interior and exterior designs and finishes will differ greatly between homes. It’s the same with software. Some are pretty while others are incredibly difficult or complex to use.
So start your search for the “best” inventory management software by asking yourself hard questions. The more requirements that you can list down, the better you can zero in on the software that meets your business needs. At the end of the day, the best software solution is the one that ticks the most or all of your requirements.
A. What is Your Budget?
Just like finding a dream property, this is the single most critical question that you need to answer. There’s little point, and a waste of time, to see sprawling multi-million dollar mansions if your housing budget is really for a small town residence. Likewise, start your software search by cutting out solutions that are out of your budget range.
Most, if not all, business software today following a subscription model based on the number of users over a period of time. A typical cloud application will charge certain dollars per user, per month. So you need to calculate how many users are likely to use the inventory management software and multiply it by the cost per user, per month.
So, let’s say that you have 10 employees in your business including yourself. You want all of them to have their own user account because you want to leverage collaboration and sharing of information between your employees. This isn’t going to happen if 10 employees share 1 paid account. Let’s be realistic here. No software will you let you have 10 simultaneous logins for one account.
Next, you multiply 10 users by the cost per user, per month. Let’s say that this costs $39.90. This is a pretty reasonable sum considering that most people spend at least $100 a month on take-out lunches if they limit themselves to a $5.00 lunch. Thus, 10 users multiplied by $39.90 is $399.00 a month.
Then ask yourself: are you willing to spend $4788.00 a year on software that will help you increase operational efficiency, productivity, and sales? How much are those benefits worth to you?
B. What Business Pain Points Need Fixing?
This is another soul-searching question for your business. If you inherited the current business and everyone is still using pen-and-paper records or spreadsheets saved across multiple desktops and laptops, then migrating to a cloud-based inventory management solution is a no-brainer. Saving your business data in the cloud will ensure that everyone is working on the latest records.
What about knowing your in-stock quantity of a product at any point in time? Most modern inventory management solutions, such as EMERGE App, adopt a perpetual inventory system and a FIFO method of inventory valuation. This means that your stock levels are continuously updated without the need for a disruptive physical count. And it is assumed that your oldest inventory will be the ones to be sold first.
Or how about more business-specific problems that you want to address with inventory management software? Let’s say that you do daily cycle counts with your stock and that you want barcode reader support in the software. Most inventory management solutions should be able to support any flavor of handheld barcode readers that you might pick as they are merely a hardware input device.
Finally, your business might involve some simple assembly or production before semi-finished goods are stored in your warehouse. Flat-pack furniture and embroidered corporate uniforms are examples. You will need inventory management software that can handle raw materials, whether in solid or liquid form and the ability to schedule production orders when you need to.
Step 2: Look For Software That Meet Your Requirements
Once you have a shopping list of business pain points and issues that you want fixing, you’re ready to start looking at the various inventory management software solutions out there. It is this very same list that you help you find the “best” inventory management software for your business. The more pain points a particular software can address, the better.
Remember to always start with your monthly and annual budget. There’s little point in being wowed by sophisticated inventory management features when they’re actually tailored for multinationals, and their pricing is strictly POA. Stick firmly to your budget and narrow down the contenders from there. This will help you focus on shortlisting the software that fits your budget.
Here are some fictitious examples that mirror real-life business pain points that inventory management software, such as EMERGE App, are designed to address and fix. This also illustrates how different businesses have different requirements. Hence, one size doesn’t fit all in finding the “best” inventory management software solution.
Example 1: Danny the Distributor
Danny is a successful distributor of wooden educational toys. He takes pride in the fact that his pre-school toys are ecological sound and that no batteries are required to play with them. Also, they are sourced from ethical pine forests in China and safe, non-toxic paints are used on the toys where needed.
Despite his success, Danny is grappling with spreadsheets to manage the stock of toys in his warehouses. Initially, they worked well for him when he was just starting as a sole proprietor and a few employees. Now he has two offices on the east and west coasts and various warehouses around the States. Whether saved locally or in the cloud, he could never be sure which spreadsheet was the latest version.
A. Replace Spreadsheets with Software
Here, Danny would be wise to pick a cloud-based application such as EMERGE App. This will do away with the various versions of spreadsheets being emailed between the offices. Saving business data in the cloud also means that all his business records: customers, suppliers, and products are available from wherever he may be in the country. At any time, Danny can view available stock for a product or sales orders recently entered into EMERGE App.
B. Manage Multiple Warehouses
Also, Danny’s multiple warehouses is another business issue. Tallying stock across multiple warehouse locations is not fun. Add different time zones to that problem and it quickly becomes a pain point that no one wants to take on. EMERGE App, however, lets Danny define as many warehouse locations as he needs. His employees can also choose which warehouse to send finished goods to, or which one to fulfill sales orders with.
C. Calculate Landed Costs Automatically
Finally, Danny has another pain point with importing his toys from China. All importers face the issue of calculating landed costs. The same product bought at different times can trip up most businesses with different landed costs. Tariffs, supply issues, and shipping rates can fluctuate. EMERGE App automatically calculates landed costs. This means that shipping and additional costs are automatically distributed proportionally to the cost of each product in the purchase order.
Example 2: Melissa the Maker
Melissa runs a lucrative side business on Etsy with custom, made-to-order baby shower gifts. What initially started out as handmade gifts to friends’ babies quickly turned into a home business when word of mouth spread and email orders started coming in. She picked Etsy as her platform of choice because of its automated order taking and the scale and reach of the market. She fulfills an increasing number of orders from international countries as well.
With growing orders and the scaling up of production, Melissa is struggling to manage the inventory of raw materials that she uses for her custom baby shower gifts. Previously, she would simply eyeball them as she worked at her crafting table. Now, she needs to stock up on various fabrics, bits, and pieces so that she can fulfill current and future orders. Also, the MOQ demanded by various suppliers means that she needs to purchase larger amounts and store them somewhere.
A. Manage Raw Materials and Production Orders
Here, Melissa’s number one issue is dealing with her raw materials, production orders and the finished inventory. EMERGE App will let her create as many raw materials as she needs to make a specific product. She can then define the quantity of raw material used to make one product. When simple production orders are issued, the corresponding quantity of raw materials is deducted while the finished products are updated.
B. Integrate with Etsy
Next up, Melissa needs to work with her Etsy orders so that her inventory count can tally with her raw materials and finished goods in EMERGE App. Thankfully, EMERGE App has built-in Etsy integration for paying customers. This means that she can import her orders from Etsy. Then let EMERGE App do the heavy lifting as her orders are fulfilled. This way she leverages Etsy’s wide market reach, billing and order taking while managing inventory with EMERGE App.
C. Expedite Shipping Workflow
Finally, Melissa wants help with her growing number of international orders. At this stage her exports are modest. She uses postal services for shipping. So she won’t be needing EMERGE App’s auto tabulation of CBM, for example. However, each international parcel needs a customs packing list for declaration purposes. EMERGE App can generate packing lists from shipments with a single click. And, Melissa can integrate with ShipStation to track shipment status and carrier updates.
By now you should appreciate what goes into the “best” inventory management software. It is the one that addresses the pain points in your business. In other words, pick a software solution that works for your business and not the other way around. Also, remember to stick to your budget and shortlist your ideal software from there. This advice equally applies to house hunting and car shopping as well as inventory management software!