1. Understand the Cost
Knowing the true cost of your inventory is the first step to controlling it. To start, know your stock. What do you have available? What moves the fastest and the slowest? What provides the highest and lowest profit margins? Once you know, you can work toward increasing your top-selling, highest profit inventory and reducing the rest. When purchasing new stock, determine the most cost effective way to purchase it: in smaller, more frequent orders, thereby limiting the time you hold it, or in larger, less frequent orders, thereby benefiting from a potential price reduction for bulk purchases.