Inventory is the lifeblood of a retail business. Managing it well is critical. Poor inventory management is one of the top 10 reasons small businesses fail, according to the SBA.
What goes wrong? Usually, a cascade of errors leads to bad decisions. In an environment of fierce competition and low margins, small businesses simply can’t afford such miscalculations.
If you overestimate demand, inventory builds up, costing money to store and eventually hitting the sell-by date or going out of style before it’s sold. Conversely, underestimating demand frustrates customers, who may give up and go elsewhere.