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Topic: New crafting biz - need inventory tracking advice  (Read 2775 times)
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« on: September 02, 2003 06:35:37 PM »

I am new to running a business and I am trying to figure out the best way to track inventory (earrings, necklaces, other) and ways to decide which items will be for wholesale and which items I will sell full price.

I am thinking about using Excel and create a spreadsheet - any suggestions?

Thanks,

Morgan
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StarStitches
« Reply #1 on: September 14, 2003 08:11:39 AM »

I don't have any other suggestions. I also use Excel and it works the best for me.
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« Reply #2 on: September 14, 2003 10:55:49 AM »

Have you considered MS Access? It's a full fledged database program, instead of a just a spreadsheet. Access will allow you to look at your information in a variety of different ways. Smiley
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sparky
« Reply #3 on: November 20, 2003 10:57:04 AM »

I happen to work in the retail software business (your job sounds like much more fun).  If you were grossing 250 million to 10 billion, I could probably help you out...

I'd have to agree with the database thing.  As your business evolves, you'll have more flexibility and options if you are using something like access (although you'd be amazed at how many very large retailers - in that 250 million + range are still running on a hodge podge of spreadsheets).

Here are a few tips that might be either obvious or too complex, but help make large retailer profitable:

- For each of your items, try to keep track (or at least estimate) all costs (generally referred to as actual or estimated landed cost in the biz).  If you don't have a good picture of how much it costs you to offer the item, you won't have a good idea of how you can price the item and still make a profit (you'd be amazed how often people guess the total cost of something is about $2.50 - but then the remember the shipping they had to pay, how much the additional packaging they use is, etc and suddenly the $3.00 they are charging for it doesn't cover all the costs).  Remember to include the cost of getting all components to you (expecially if you are ordering many parts and doing some crafty assembly yourself).  Include your labor.  Try to pro-rate the cost of any 'big ticket' capital inverstments (tools you need to assemble or storage).  Remember packaging and shipping costs (that extra bit of ribbon you add to the packaging because it looks nice eats into your profit - two or three things like that can eat all of your profit if you are not careful).  If you are importing goods, remember the costs of import duties and freight forwarders.  I could go on and on.  But the idea is to keep track of these costs and prorate them to a unit level so you have an accurate idea of the weighted average cost of an item so you can price it appropriately.

- If you have any kind of store, assume 15% 'shrinkage' (meaning accidental breakage and theft).  Build that into your item costs so that selling 85% of your inventory will cover the costs (and give you some profit) of all 100% of your inventory.

- Try to keep at least some track of your inventory.  You'll want to know how much you are out (and need to claim on insurance) if you warehouse burns down (or whatever - more likely in the beginning your garage roof springs a leak or something).  Even if you are giving it away as samples, keep track.  If you don't have records, insurance people will challenge you and your accountant will hate you (there will be no way value your business if you don't have a good picture of what you own).

- Double check all invoices and payments from wholesale customers or suppliers.  In the industry, they have a 10% error rate.  If they overbill you - challenge it.  When underbilled (and therefore the average cost of your items goes down a bit...), most retailers just take the extra profit.

I could go on and on and on.  If you want any more info, just let me know.
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« Reply #4 on: November 21, 2003 12:42:20 PM »

wow sparky you really know your stuff!

i'm not sure if all the paperwork side of it puts me off running my own business...
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sparky
« Reply #5 on: November 25, 2003 09:07:41 AM »

It doesn't have to be terribly complicated (a trusty three ring binder where you write down everything is enough - doing the same thing in a spreadsheet or access database is just an extension of the same concept.  It just helps to get started on the right foot.

I have seen way to many fab small businesses go under.  Often times, people have great products.  But they are so excited about the products that they aren't focusing too much energy on the business side of things.  Banks generally require a business plan that lays out how your business will work, what your plans are, how you will track supplies and inventory,, etc. before they will make a small business loan.  Even if you aren't looking for a loan, I think it makes sense to sit down and go through the process so you have an idea of how you will handle certain situations before they pop-up.

Good luck in all your crafy business endevors.

S
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