Managing Inventory

[BusDreamer]

I want to open an online shop to sell crafts tools. The warehouse will be at house. Now, I am trying to arrange my office to be suitable to store the inventory. I have few questions?

is it necessary to buy shelves to store the inventory?
I am thinking of having these shelves from ikea, what do you think?
HEJNE 4 sections/shelves - IKEA (http://www.ikea.com/ae/en/catalog/products/S49046978/)

How can I manage the inventory to be easy to get the items when they ordered, and to keep track of the quantities I have?

I didn't contact any supplier yet, so I have no idea about the minimum quantities I will order.

[Fulcrum]

You're getting ahead of yourself. How do you know how much warehouse space you need when you don't know what your minimum purchases need to be.

As for designing shelving/racking, how big are the tools and how heavy are they? This will determine if you will be buying shelves from IKEA or having some custom made.

[gokhan]

Without shelves, you're limited to floor space you got. With shelves, you can scale vertically. I know those Ikea shelves, they are sturdier than they look. But if the goods you'll store are heavy, they may not have enough support especially when you store heavy items at the top (since excess stock most probably will be put there to make way), raising the center of gravity.

Does your shop software have inventory? If not, I would prefer one with inventory functionality so it can keep track of quantities and deduce sales as they happen. Otherwise, using Excel or a spreadsheet on Google Docs would be an option for start, but will be a headache when you grow.

Buying lots of inventory without knowing if you'll be able sell them online is a risk. Online sales depend on lots of thinks, mainly your site should be discoverable. Is it possible to deal with a local shop or something to gather first few items (maybe even without any profit) while you're working on your site's discoverability (search engine rankings, ads etc.)? That way, you would worry less about the static cost of inventory.

Good luck.

[BusDreamer]

Thank you all for the answers.
Thank you gokhan for your opinions. Yes, I am thinking of having two of Ikea shelves, and fortunately I will still have some extra space on the floor for any extras.
Regarding the software I didn't decide about any, but I am thinking of using a software not an excel sheet.

>>Buying lots of inventory without knowing if you'll be able sell them online is a risk.
Yes, it is true. But, I already have a blog with good number of audience, and I am thinking of a marketing plan.

Thank you again. Your answers are a great help for me :)

[turboguy]

As far as the shelves go, I would suggest looking at Home Depot and Lowes before you buy the Ikea shelves. You might also find some nice used shelving on CraigsList. Usually when starting a business whenever you can save a few bucks it will help.

As far as managing inventory I would suggest that some of the accounting programs will manage the inventory for you as well as keep your financial records and P&L up to date. We use Sage (formerly Peachtree) in our business but check out Quick Books and some of the others as well. I haven't looked but there may be some free open source accounting programs out there as well.

[Freelancier]

Have you considered just partnering with a distributor or manufacturer who will drop-ship it for you, so that you don't have to keep inventory at all?

[BusDreamer]

Thank you turboguy. I will consider the options you mentioned.
Freelancier, Thank you for your suggestion. I didn't consider this option. But, I want to order many items from different brands, and I don't know if all the suppliers will give me this option, and if the customers will like the idea of receiving items separately.
Another thing I am considering is to make the shipping cost for my target customers as low as possible. I don't know if this will be a suitable for my region where shipping costs from US is high little bit, and most of the brands and suppliers will be there?

[krymson]

Going back to your question on quantity management, if you're selling online only, you should manage it from your ecommerce platform and reduce your work. At the end of every month you should perform an inventory check to make sure your inventory numbers are correct. Once you get the hang of that and you're noticing that inventory numbers are accurate every month I would move to quarterly inventory checks then move the bi-annually then to the normal annual. But let your ecommerce platform do the work for you.

[BusDreamer]

Thank you krymson for the suggestion.
What I am thinking now is to use quickbook, and integrated with shopify (Online Shop Platform). As I think that even if I used the Online Shop Platform to manage inventory, I will still need to manage suppliers and other business expenses.