5 Things I Learned the Hard Way: Tips on Inventory Management
I launched my WilloToons gift line in 2007, and over the last 4 years I have learned more about running a product business than I ever bargained for! Recently I’ve been sharing what I’ve learned through consulting and speaking, but up until now I haven’t posted anything on my site. I detail a lot of these lessons below, but if you’re more the video-watching type, you’re in luck: I recorded a video!
If you can’t see the video above, click here to watch it on Vimeo.
When I started my business, I dove in, and really just tried to figure out everything myself. I’m going to tell you the top five things I learned (the hard way), in hopes that this saves others out there who want to start or currently have an existing small business selling products.
How much to order, what sizes, what colors… in the beginning it’s just a guessing game; albeit a fun one at that! On the first big order, I was creating my line for the first time, totally in the creative flow and felt on top of the world. Receiving all of the boxes and seeing all those tees in my garage was thrilling, but I knew it meant I was going to have to sell those puppies. Enter hard lesson #2…
After I had my inventory, had done my product shots and wrote all the copy for my newly redesigned website, the first thing I did was launch my online store. However, it didn’t take long before I also had a stocked Etsy store, was selling at craft & street fairs, scoring my first wholesale customer, and selling on consignment, too! Now, while I think selling through multiple channels is a great way to go, it definitely makes for considerably more complicated bookkeeping! Which, yes, conveniently brings me to my third, and possibly most difficult lesson.
Now, this is where my story actually hits the cold hard floor of reality. I detail this out in the video, but let me just say that my #1 tip for those starting a business selling products is to have your inventory & bookkeeping systems set up in advance! As designers, crafters and artists, the boring stuff is often the last thing we want to think about; we just want to make cool stuff and we’re over the moon people actually want to buy it! Please heed my warning and make sure you have it set up right in the beginning. Not only will this save you headaches and stress, it’ll keep money flowing in and give you the data to make informed decisions down the road.
Time is Money
When you’re running any kind of business, you quickly realize time is money. You only have so much capital, and since most of it is sitting on shelves waiting to turn into dollars, all of your actions need to be geared towards ROI and conversion. This is also where you need your systems to be working for you, so that you know what is selling, and what isn’t (i.e. you can’t keep it all in your head forever ;). Remember, all of this data will help fuel intelligent decisions for your next inventory order, too (See Reporting below).
DIY is Overrated
I’ve said it once, I’ll say it again: the key to growing your business is knowing your strengths and owning your weaknesses. You can’t do everything yourself, and the sooner you realize that, and ask for help, the better. That said, working with others brings its own set of challenges: you need the right tools to collaborate, and you’ve got to trust the systems you’ve set up. Once it IS set up right however, it will make your life easier, save you more time and has the potential to make you way more money. Which is pretty much the goal, right? Besides having a blast and loving your life, of course.
Do any of these challenges hit home for you? There’s a lot to learn when you start your own business, and I love helping entrepreneurs. People have been selling products for hundreds of years now, and while there are definitely a huge new set of tools at our disposal these days, you don’t have to reinvent the wheel.
There is a Better Way!
Recently I discovered Stitch, a web-app made by Stitch Labs, and I cannot tell you how bad I wish it had been around in 2007 when I started my business!!
Stitch Labs a relatively new startup, but you’d hardly know it by how beautifully their website and app is designed. This is one of those products that make me so grateful I live in the future. Meaning, while it wasn’t around 4 years ago, I’m so grateful it’s finally here now! Given how many small business owners and crafters I know with many of these same hurdles and headaches, I just want to shout it from the rooftops. Which, yes, is basically what this post is all about. :)
Here’s a few reasons why Stitch rocks:
- Inventory Management
Whether you’re selling across multiple channels or just one, Stitch is a beautifully designed system where you can manage inventory AND it’ll provide you with insights from your sales. Plus:
- They’ve made it incredibly easy and super fast to add your inventory to Stitch [watch their latest new video to see what I mean].
- Soon you’ll be able to tie your online shopping carts to Stitch for seamless integration with online sales & inventory! Game changer.
If the inventory management wasn’t the most epic part of Stitch, I would have to say hands down it’s all about the reporting. Being able to see what’s selling, what’s not, and even have the ability to tag various contacts (e.g. sales channels, stores, sales verticals, regions, etc.) provides for an incredibly robust way to view your sales, way above and beyond your standard P&L (Profit & Loss report).
- Bookkeeping & Accounting
- Simply export a file at tax time for your accountant – or there’s also One-Way Integration into Quickbooks
- You can track both your income and expenses in Stitch – and have all of this data factored into the financial reports & pretty graphs, accessible at any time from anywhere!
- Multiple Users
Go ahead and bring on that intern, assistant, Merchandise Manager, Sales Rep or business partner! You can add multiple users to your account, and even set specific permissions. Oh, and you can upgrade/downgrade at any time, in case you only need the extra help occasionally.
- Contact Management
This might be as simple as having a contact named “Renegade Craft Fair” for all the sales you do at that event, and another called “Modern Mouse”, for the one consignment store you are selling at… or you can manage a whole slew of wholesale customers. Regardless of your needs, it’s ready and really beautifully done. Not only do you have all of your contacts set up in relationship with your invoices, order forms and expenses, but you can tag them, in order to run reports based on certain criteria. See their blog post, “Tracking All Sales Channels” for a few examples.
- Line Sheets!
For designers who have wanted to venture into the wholesale world, but don’t know quite how to get started, the fact that Stitch has line sheets takes their service to the next level. Forever I have wished I could print line sheets out of the places where all my inventory and product information is stored already, and because my line was so big, I actually never even got around to it! Stitch solves that problem like a little added cherry on top.
- UPDATE: Stitch now integrates with Etsy and Shopify!! GAME CHANGER! :D
So awesome, right?! For those of you who want to give it a spin, you can use promo code ‘willotoons’ to get an additional 15 days tacked onto your free trial.
Also, if you’re still not sure Stitch would be a good solution for you, or if at any time you have questions when you’re setting up your products and such, just reach out to the guys (Jake and Brandon) at Stitch Labs. They are super nice and happy to help!
The Bottom Line
Running an inventory-based business is often a labor of love, and the overhead required is usually your precious time and energy. Having your systems set up so that your time and energy is spent wisely and efficiently is the foundation to make or break your business.
Note: Clearly I’m unabashedly a walking commercial for Stitch. :) For those who know my business, and saw all of the work it took managing my WilloToons apparel line over the last 4 years, you’ll get why I love it so much. Which is why it also makes total sense that I’m working with them (they’re one of my
Consulting Clients UPDATE: I just joined on as Co-Founder & VP of Marketing!), as I only work with companies I really believe in. All that said, I’m not writing this post for any other reason than I truly, 100% believe that every business selling products should know and consider using Stitch. Sure, it’s not for everyone, but for those that have to manage multiples in inventory (meaning you don’t solely make one-off pieces), this system will not only help you stay clear on what you have and where, but it will provide you with insightful data to assist you in making smart business decisions to save time and sell more.
My clients range from small business owners to startups, with one common thread: I help entrepreneurs find the support they need, so that they may concentrate on what they do best – continue to grow their businesses. If this reaches a few folks out there who, like me, have been looking for a solution like Stitch, then awesome. That’s the kind of win-win that makes me love what I do!
UPDATE: Check out our new animated overview video, How Stitch Works (yup, I dug into my old school Flash Animation skills to crank this out ;):
UPDATE: I moved on from Stitch, but they’re still going strong! And you can still use promo code ‘willotoons’ for an extended free trial. ;)