Brightpearl: Retail-tailored operating system for advanced inventory management and beyond
If you’re a fast-growing e-commerce brand looking for a flexible central system to automate multi-channel inventory and orders, and gain insight on your business performance, Brightpearl may be the right
solution for you.
As the industry-leading Retail Operating System, Brightpearl is designed to automate all the time-consuming yet critical post-purcha+se operations including inventory management, order management, warehousing, fulfillment, shipping, purchasing, accounting, retail BI and more. Brightpearl will help you save time, make data-driven decisions, so you can achieve your growth goals. Here’s how…
What different types of Inventory Management System are there?
Brightpearl not the right solution for you at the moment?
No problem, you also have other types of systems on the market to help you manage inventory based on your current needs. Here are the major types of inventory management systems or alternatives.
What you need to check when choosing an Inventory Management System
The aim of your inventory management system is to help you keep track of your stock in the most seamless, efficient way. That’s why you’ve got to make sure any prospective system has all the features you need to manage your inventory, but what are those?
We’re going to be breaking down all the elements of an excellent inventory management system, so you can cross-reference them with any system you’re considering.
From easily scannable inventory summaries (like the one pictured below in Brightpearl) to top-class customer support, some features and functionalities simply set some inventory management systems apart from the competition. With that said, let’s explore the items you need to check when you’re trying to determine whether a given system is the one for you.
Best alternative Inventory Management Systems for small business
For those of you wondering which is the best inventory management system for small business, we’ve compiled a list of five solid choices you might opt for.
We’d be remiss not to mention that, of course, Brightpearl is always an option. With advanced reporting, inventory management, and automation features (among others), Brightpearl stands out as an excellent choice for anyone looking for the ideal inventory management system.
If Brightpearl is not the right solution for you, though, here are some other systems you could consider:
What is inventory management?
But hold on, let’s not get ahead of ourselves. If you’re in the process of just starting out in retail or wholesale, you may be asking yourself “What is inventory management?” or “What is inventory control?”
Effective inventory management and inventory control are one in the same – and the definition is pretty simple to understand.
Inventory management refers to the process by which you track the amount of product you have on your warehouse shelf, in store or sitting with other retailers and distributors. This enables you to succeed in having the right number of units in the right place, at the right time and for the right price.
When effectively tracking and controlling your physical inventory, you’ll know how many of each item you have, when you might be running low on products and whether you should replenish that item in order to keep selling it.
And as a busy business owner, you should be able to do all of this at a glance. This enables you to make good purchasing decisions quickly and easily. It’s where having the correct sales and inventory management system comes in, too.
What is an Inventory Management System?
You’ve now got a robust understanding of the basics of inventory management and how they’re part and parcel of your day-to-day operations. It’s all about tracking stock, supplies, and sales. In short, everything that impacts the resources you have at hand.
Inventory management systems are your means of organizing all the elements that go into inventory management. It’s the process by which you track goods from one end to the other along your supply chain. Ensuring throughout that you know what you have, where it is, and how to manage it.
There are many types of solutions. No one option will suit every business. Each organization has its own needs and principals. In general, though, automated inventory systems fall into two categories:
- Periodic Inventory Management Systems
- Perpetual Inventory Management Systems
Periodic inventory management systems
This is what is probably best termed as ‘old-fashioned’ inventory management. In fact, the name ‘stock-taking’ is perhaps a better descriptor. Companies count their stock at consistent but comparatively long intervals.
A typical periodic system might see a firm perform a stock take every three or six months. At that time, staff will check warehouses or storerooms, and count the units of inventory on hand. They will typically also calculate the financial value of the stock, as well as raw materials on-site.
At the point of each stocktake, an organization can check that inventory levels make sense. Any decrease in inventory would need to match up with sales figures or wastage. This is the only way to spot any discrepancies that could be damaging to the bottom line.
Periodic inventory management is far from ideal. It’s generally only suitable for the smallest of retailers. It’s only firms that hold and sell minimal volumes of inventory that can get away with a periodic approach. For other firms, such an approach makes it far too easy for costly errors to arise regularly.
Failing to track stock continually, for instance, can allow either overstocking or understocking. Both of these occurrences are hugely damaging to a business. Overstocking means you have valuable inventory sitting idle. You’re also wasting critical warehousing space on that slow-moving stock.
Understocking is just as detrimental to operations. When you don’t have enough inventory, you must refuse orders, or worse, fail to fulfill all the orders you do accept. Having to take either of those avenues will hurt your reputation with customers.
There are also financial and reporting downsides to choosing periodic inventory management. This handy guide to inventory management and accounting can teach you all you need to know for both periodic and perpetual systems. Speaking of which.
Perpetual inventory management systems
The other principal type of inventory tracking solutions are the perpetual variety. With perpetual systems, everything related to a firm’s inventory and supply chain gets tracked in real-time. Stock levels and associated reports get updated with every sale, delivery, or breakage.
Most retailers use a perpetual inventory management system of some kind. These systems have a raft of advantages over the periodic alternative. In general, perpetual systems allow a higher level of accuracy. That makes for better-informed future planning.
Workflows of Inventory Management Systems
Inventory management systems help you take care of lots of workflows. The exact nature of those workflows depend on how you’re using your inventory management system, and they’ll vary depending on whether your software is designed for things like multichannel inventory management.
We’re now going to take a closer look at four of the most important workflows that are handled by just about any inventory management system:
Electronic inventory management systems explained
An electronic inventory management system is essentially a digitized counterpart to more traditional inventory management solutions. Examples would include the standalone software and ERPs mentioned above.
In other words, an electronic management system is functionally the same thing as purpose-built inventory management software, or a web-based inventory management system.
A great electronic management system should be both easy to use and feature-rich. It should be intuitively structured, so no one has to wonder what to click on to get their desired results.
An aside: Why implementing a warehouse Inventory Management System is important
Speaking of warehouses, they’re indispensable for any retail business, e-commerce and offline alike.
In-person businesses can’t store all their stock in their shops. For one thing, it would require them to have a lot of space. There’s also the issue of distributing stock across multiple shops. What happens when Shop A has a surplus of something Shop B needs to replenish, but it’s difficult to transport stock between the two sites?
As for e-commerce stores, they need warehouses as a point between the customers and suppliers. After a product is readied, it gets put into a warehouse, from where it can then be shipped to anyone that places an order.
So, warehouses are incredibly important. But what about warehouse inventory management systems?
To put it simply, warehouses are disorganized without them. These systems ensure every bit of stock in every warehouse is accounted for, and that it’s all in the right place. That means these systems are critical to anyone hoping to run their retail business effectively.
11 Benefits of effective inventory management
Keeping track of your inventory is fundamental to your success in retail. At the most basic level, after all, your job is to supply the products to meet consumer demand. You can’t do that without effective inventory management.
Listed on the right are the top eleven benefits of effective inventory management that choosing the right system, as detailed above, can deliver your business. They all combine to explain the importance of accurate real-time tracking of stock, and can be easily achieved by using dedicated inventory management software.
Techniques for building an efficient Inventory Management System
Accurate inventory management and inventory control hinge on best practice and using effective inventory management techniques. To help, consider the following 12 inventory and warehouse management best practices and activities.
Integrating an Inventory Management System with your retail tech stack
We’ve touched upon the importance of integration a couple of times already. Standalone systems – for any business process or area – are not the way forward. At least not for the majority of businesses. Having disparate solutions leads to data silos. They put up barriers to your firm working as efficiently as possible.
There is a raft of options when it comes to software and tech tools to support your business. This retail tech stack report should give you some insight. When choosing any addition to your retail tech stack, ease of integration should be a key concern.
Fortunately, it’s straightforward to unify inventory management systems with your other solutions. The best systems and tools now get built with integration in mind. They boast high-performance integrations with many third-party apps and services. They include examples such as Amazon, Shopify, and more.
The highest-end solutions, too, are comprehensive retail platforms. They don’t only provide dedicated inventory management; they offer that function and more. They can streamline warehousing, back office, accounting, and plenty of other vital processes.
What is a retail Inventory Management System?
An inventory management system for retail is a tool that’s designed to make it easier for you to handle everything relating to your retail inventory. It’s the platform you use to manage each aspect of your stock such that your business is able to run as efficiently as possible.
It might be tempting to think an e-commerce business wouldn’t have as much need for a tool designed specifically with inventory in mind. After all, e-commerce companies don’t have in-person shops, so they’d have less inventory to worry about, right?
Wrong, actually. E-commerce stores still have to stay on top of everything that happens with their products. In some cases, e-commerce businesses will actually have more stock than their in-person counterparts, especially when they’re multinational businesses.
With that in mind, let’s explore what makes Brightpearl an excellent choice for your e-commerce inventory management system regardless of the platform your shop is primarily based on:
What’s the cost of an Inventory Management System?
The cost of inventory management systems varies depending on the specific system in question. Most systems will charge on a monthly basis, though some offer discounts if you pay an annual fee rather than a monthly one.
Another matter that complicates the cost of an inventory management system is the fact that each user’s needs are unique. That means that anyone using an inventory management system will have different requirements for it, which in turn can lead to paying for different features. With some providers, those features are priced individually (or in bundles), so it’s difficult to give a straight-up, one-size fits-all answer.
However, this only means that the pricing is flexible.
If you’re interested in discovering how much your ideal inventory management system would cost you, it’s worth getting a quote at Brightpearl. Simply tell us what you need, and we’ll be able to give you a clearer idea of how much you should expect to budget to meet those needs.
Wrapping up; How an Inventory Management System could be vital to your success
When you boil it down, retail is about having the correct goods to sell at the right time. There are few things more fundamental to the sector, therefore, than inventory management. That’s why you need the right inventory management system to support you in your daily work within the retail sector.
Inventory management systems give you the support you need to ensure your stock is always in the right place at the right time—and that you’ve ordered any item in the right quantity. That’s why excellent inventory management systems like Brightpearl come with a built-in forecasting feature that gives you an accurate idea of the future popularity of any given item in your stock.
In short, inventory management systems are there to make your inventory handling as seamless as possible. This makes them vital to your success.