Skip to main content

Inventory control can affect sales, budgets, customer satisfaction, and so much more. From being able to access inventory quickly to always having enough items in stock, inventory control is a complex topic. While you may have to make some mistakes on your own, you should try to avoid mistakes where you can. 

What is inventory control?

Inventory control refers to all aspects of managing your company’s stock levels and getting these products to customers as expected. The most important aspect of inventory control is ensuring accurate and sufficient stock levels in order to keep up with consumer demand. This process may be done in-house or through a third-party company such as a logistics provider or order fulfillment warehouse. The use of fully automated inventory control systems allows retail companies to successfully manage their inventory without costly mistakes or issues.

Why inventory control is important in business

Inventory control is one of the most important aspects of any products-based business. Failure to properly manage your inventory and successfully fulfill orders can lead to all sorts of costly issues and cut into your potential profits. Understanding how to manage your inventory and avoid inventory control problems is the key to your future business success and profitability.

Most Common Inventory Control Problems

While there are many things that can go wrong when it comes to inventory control, the most common problems that small businesses encounter are as follows.

  • Understocking or overstocking: Understock and overstocking can both be costly mistakes. In some cases they are a result of negligence, while in other cases they may be a result of poor inventory control or cash flow restraints. Understocking most commonly results from cash flow challenges or supplier problems. Both of these issues can easily be fixed, but before you dive in make sure you are managing inventory properly and know exactly what you need. On the other hand, overstocking occurs when too much inventory is purchased. If you don’t have adequate inventory tracking systems in place it’s easy to overstock inventory on accident. The sooner you acknowledge that you’re overstocked, the better. Make efforts to liquidate some inventory or devise a plan for moving it. Overstocking and understocking can affect your bottom line through lost profits, tied-up cash flow, and missed sales. Utilizing a robust inventory management system in conjunction with analytics can help prevent these costly issues.
  • Supply chain difficulties: Retail businesses are often at the mercy of their suppliers. Issues with your supply chain can lead to shipping delays, product shortages, the inability to fulfill orders, and other challenges to keeping up with consumer demand. These issues also affect customer satisfaction and can hurt your company’s reputation. It may sound scary to jump ship, but trying a new supplier may be necessary. Before switching, be sure to vet the new supplier. Asking to speak with current customers can be a great way to gather real insight.
  • Inaccurate stock: You can’t sell a product that isn’t actually on your shelf. A lack of automation and lack of communication between your warehouse and your website can lead to mistakes in your inventory count and inaccurate stock levels. While it may require investment, having accurate real-time data helps you spot problems and keep customers happy.
  • Demand complexity: There are many factors involved in proper inventory control. Businesses must remember to account for these factors including demand volatility, seasonal fluctuations, product life cycles, and supply chain complexities. These challenges can make it difficult to plan for and maintain the right amount of inventory.
  • Lack of communication: If different departments of your business are not properly communicating with each other, you will be much more likely to encounter inventory control issues. For example, whoever is in charge of purchase decisions should be kept informed of every aspect of inventory management from the current state of the warehouse to any anticipated changes in market conditions or seasonal demand. The right technology can increase this visibility and cooperation between everyone involved.
  • Lack of automation: If your company is still relying on paperwork and other manual systems, you may be missing a key opportunity to take your business to the next level. A lack of automation can be financially costly, take up too much time, lead to mistakes in data entry, and allow important information to fall through the cracks. On the other hand, the right inventory management system can allow key employees throughout the organization to stay informed and equipped with real-time (and accurate) data. A fully automated and integrated inventory management system is always the best choice.
  • Lack of experienced staff: When you’re running a product-based business, it’s key that all employees involved in inventory management, logistics, and order fulfillment are experienced and trained. Having knowledgeable staff will help your company quickly identify any inventory control problems and prevent them from happening in the first place. On the other hand, inexperienced staff can lead to damaged goods, inaccurate data, and poor business decisions. Remember that staff is at the forefront of inventory issues. Hire individuals you trust and are competent, even if that means paying them more. Furthermore, meet with them regularly to find out what’s working and what’s not.

Tips for solving inventory control issues

Luckily, there are many things your business can do to stay on top of inventory management and avoid the most common inventory control problems. Consider these valuable tips below to help you maximize productivity and profits. 

  • Consider outsourcing: Not all companies have the ability to manage their inventory themselves, especially small businesses who are just getting started. For these retail companies, hiring a third-party company who can expertly handle all of your logistics, inventory management, and order fulfillment can be a smart move. As an added bonus, leaving your inventory control to the experts frees you up to focus on other aspects of your business.
  • Incorporate analytics: In order to avoid common inventory control issues such as understocking and overstocking, all of your business decisions should be data-driven. Utilizing consumer analytics and inventory management KPIs will help your company avoid these issues. The right data allows you to make informed business decisions, forecast for future demand, account for seasonality, track product sales cycles, and maintain accurate inventory levels. Companies should also have a solid understanding of their target customer and current market conditions.
  • Incorporate technology: The use of automation, real-time inventory tracking software, and other technology can help your company stay on top of inventory control. Product visibility is extremely important to avoid understocking, overstocking, and inaccurate stock levels, so consider replacing any outdated systems with the latest solutions. Investing in the latest technology becomes even more important if you are managing your inventory remotely across several locations. Your inventory management system should be able to scale with your business, provide accurate information in real-time, and be accessible to employees throughout your organization anywhere in the world.
  • Invest in employee training: The more skilled and knowledgeable your employees are, the more equipped your company will be to handle logistics, order fulfillment, analytics, forecasting, and inventory management. An investment in the continued education and training of your staff is never wasted.
  • Keep up with trends: Industry knowledge is especially important for retail business owners. In order to make the best business decisions and avoid issues with your inventory levels, be sure to stay up to date with current market conditions and trends.

How Kickfurther can help

A lack of cash flow can hinder many retail companies from ordering the stock they need to remain both competitive and profitable. Kickfurther helps companies secure the funding they need for inventory. As the world’s first online funding platform that enables companies access to funds they are unable to acquire through traditional sources, we understand the struggles small business owners face. 

For companies that sell physical products or non-perishable consumables and have revenue between $150k to $15mm over the last 12 months, Kickfurther can help. We connect brands to a community of backers who help fund inventory on consignment and give brands flexibility to pay that back as they receive cash from sales. 

Kickfurther can help startups fund millions of dollars of inventory at costs up to 30% cheaper than the competition. With more than $100 million in inventory funded to date, Kickfurther can help you get funded within a day or even minutes to hours. 


Inventory control is critical for profits, customer satisfaction, and all business operations. In business it’s easy to overlook a few problems, but remember, that one problem will turn into more. If financial restraints are the cause of inventory control issues, take charge. By utilizing inventory funding through Kickfurther combined with staffing the right people and implementing efficient inventory management systems, you can maximize the potential of your business.

Interested in getting funded at Kickfurther? Here are 3 easy steps to get started:

#1. Create a free business account

#2. Complete the online application 

#3. Review a potential deal with one of our account reps & get funded in minutes

Copy link
Powered by Social Snap