Page 21 – Kickfurther

Tips to Simplify Your Purchase Order Process

Posted on January 23, 2023 by Kaylyn Perry

The purchase order process should have steps that are followed each and every time. Purchase orders are designed to offer clarity and transparency between buyers and sellers, but they can be complex.

On the surface, the purchase order process may seem to consist of simply creating a document that tells the seller the items you wish to buy, their quantity, and the purchasing and delivery terms. But it also requires a variety of purchase order process steps such as considering supply and demand, budget, and more.

Businesses that can simplify their purchase order process will maximize their budget, improve compliance, minimize risk, and save time and money. But what steps will they need to take to make this happen? This article will answer the question, how does the purchase order process work, and provide tips on how to make your process as simple as possible.

What is a purchase order?

A purchase order is a legally binding agreement created by a buyer and presented to a seller. It states the items the buyer wants to purchase, the quantity of each, and the payment and delivery terms. It protects the buyer by giving them a legal record of what they ordered. It also guards the buyer against unexpected price increases.

How does the purchase order process work?

The purchase order process steps are as follows:

Create requisition: This step involves creating the order for the product or service the company intends to purchase. It can be created manually or automatically.
Budget approval: Next, the order is reviewed by upper management so the budget can be approved before it’s sent. If many executives are required to approve the budget, it can add time to the purchase order process.
Issue the purchase order: This involves the purchase order being officially issued to the vendor. It differs from the requisition step as the requisition may have only determined the products needed. In this step, a vendor will be identified, and the order will be sent.
Receive material: Next the material is received by the company. If the product is tangible, employees will check it to ensure the order was accurately fulfilled and no items were damaged. They will then inventory the items. If they got a receipt, it would need to be filed.
Receive the invoice: Vendor invoices can be sent in one of two ways. The vendor may send the receipt as a paperless document that must then be manually entered into the buyer’s system. Or it may be sent straight through Electronic Data Interchange which fully integrates the invoice into the buyer’s backend system eliminating the need for data entry.
Invoice reconciliation: The invoice is then reconciled against the PO (or in some cases both the PO and receipt). If no discrepancies are found, the buyer will pay the vendor based on the payment terms.

Advantages of optimizing your purchase order process

Optimizing your purchase order process can benefit you in the following ways, and beyond.

Compliance: If you use the right procurement software you will be able to match orders, run audits on inventory and identify important documents easily. This will ensure you comply with the standards needed to keep your business running.
Minimize risk: With suitable technology, you can automate systems to provide order details, costs, and payment and service terms. This will make it easy to correct orders that may be incorrect due to a vendor error and minimize the risk of disputes turning into legal battles.
Improve budget management: When all your purchase orders and invoices are input into a central location (ideally in a computer software program) you will be able to see them at a glance. This will give you a quick picture of your budget so you can handle money matters more effectively.
Better business relationships: A simplified purchase order process will conveniently provide you with the terms of each order. This means any miscommunications between the vendor and buyer can be easily resolved making for better business relationships overall.
Save time and money: Simplifying the purchase process will add efficiency to the way your company does business. It will save you time and money so you can focus on other tasks and increase your bottom line. Most importantly though, it will improve the experience for clients.

How to simplify and improve your purchase order process

Whenever possible, processes should be simplified. This same rule of thumb goes for purchase orders too. Here are some ways that businesses can simplify and improve the purchase order process.

Create a list of established preferred vendors: If buyers have a list of established preferred vendors, they won’t have to take time to find the best vendors when they want to order a product. Determine the vendors that offer the best prices and highest quality items you require and have their information on hand so you can contact them as needed. This can also protect the business to ensure employees are not choosing friends as vendors for a personal gain.
Utilize technology: Technology can be used to automate systems and cut back on errors, so the purchase order process is more efficient.
Inventory sourcing strategy: An inventory sourcing strategy consists of analyzing business needs and historical spending on a regular basis. This will make the decision-making process simpler when it comes to future purchases. It will also increase company earnings.
Negotiate with your suppliers: It’s advisable to negotiate with suppliers for discount rates within reason. This will be especially effective if you are a regular customer and/or buying in bulk. Before asking for a discount, make sure you are asking for a reasonable discount as you want to keep the supplier encouraged to work with you so you can both maximize profits.
Review your approval process: The approval process can be time consuming, especially if you’re bringing in various decision makers. Companies should review their approval process to make it as simple as possible.
Improve information access: Your purchase order process should run smoothly if all information regarding purchases is stored in a central, easy to access location. There are several software programs that can serve this purpose. Do some research to find one that’s best suited to your needs.
Assess existing processes: Assess existing processes to determine what may be getting in the way of your business functioning at optimal efficiency. Shadow the person handling purchase orders to see how certain tasks can be sped up. Do regular reviews to ensure your systems are always running as smoothly as possible.
Automation: Businesses should take advantage of automation whenever possible as it can minimize error. Furthermore, automation helps keep processes consistent. Purchase order creation and processing can be automated to some extent.

How Kickfurther can help

Once you’ve mastered purchase order processing, you can accommodate more orders. Resources should be spent on fulfilling orders, providing customer support, marketing, and every effort that drives business. While this includes purchase orders too, this should really be one of the easier parts of the process. As your business achieves efficiency with purchase order steps, you can open the door for more orders. More orders means more inventory, and that’s where Kickfurther comes in.

Kickfurther is the world’s first online inventory funding platform that enables small businesses to access funds that they are unable to acquire through traditional sources. 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 and small businesses fund millions of dollars of inventory at costs up to 30% lower cost 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.

Closing thoughts

The purchase order process is something companies must continue working on to ensure optimal efficiency. With the right strategies, you will get your process down to boost compliance, minimize risk, optimize budget, and build better business relationships. You will be able to work out a system that helps your company grow.

Kickfurther can help you improve your purchase order process by helping businesses access funding they need to acquire inventory.

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

Learn more about purchase order financing at Kickfurther.

A Guide to Your Supply Chain

Posted on January 23, 2023 by Kaylyn Perry

Supply chain issues can cause significant problems for businesses. From ensuring you’re operating as efficiently as possible to always having enough product on hand, supply chain can impact so many business functions. Supply chain management is critical not only for success, but customer satisfaction too. An effective supply chain management can also increase your bottom line. To keep things running smoothly, you’ll need to pay attention to supply chain issues. And, when it comes time to raise funding, investors will be happy to see efficient and healthy supply chain management in place. Read on as we learn more about supply chain management and how it can impact your business.

What is supply chain management?

Supply chain management oversees all aspects of your supply chain. It ensures you have the inventory you need to fulfill orders and that customers receive their items as expected. It can also impact the price at which you’re able to deliver products. Unnecessary steps in your supply chain can drive costs up. Supply chain management involves all entities necessary to the process including manufacturers, suppliers, producers, customers, and end users.

How does supply chain management work?

Supply management involves three levels as follows.

#1. Strategic Planning:

Upper management typically oversees the strategic planning process. It involves deciding whether to expand into new markets, add items to inventory and so on. It may also include adding software to make the supply chain management more efficient and opening a new facility for supply chain purposes.

#2. Tactical Management:

Tactical management puts strategic planning into effect. It involves creating contracts and production schedules and setting up regulatory guidelines for logistic planning. It aims to control cost and minimize risks.

#3. Operational:

Operational planning determines how the day-to-day tasks involved in supply chain management are carried out. It involves overseeing production operations, managing inventory, and making decisions to ensure the company reaches its goals. It aims to boost cost benefit and efficiency.

The key elements of supply chain management include

Demand management: This involves predicting future demand enabling executives to make decisions regarding external spending, purchase order management and waste management. Processes should be assessed on an ongoing basis to keep costs under control and see to it that raw materials are used efficiently.
Communication collaboration: Effective communication is necessary in supply chain management. Vendors and suppliers must communicate with one another. There must also be good communication within companies. This will help ensure operations run smoothly.
Business process integration: The aim of business process integration is to see various workers, departments, and functions as a cohesive entity. It encompasses various facets of the supply chain management process including relation management between customers and suppliers, product development, procurement, manufacturing flow management, inventory management, order management, distribution, and logistics.

Common supply chain management challenges and issues

Efficient supply chain management can greatly benefit a business. But, companies can face their share of challenges when implementing it. Here are some common supply chain issues that businesses may encounter.

Globalization: It’s not uncommon for companies to seek out manufacturers and suppliers in other countries to reduce costs. However, this leads to challenges when it comes to manufacturing, storage, and logistics across borders. It can also significantly slow down the shipping process negatively impacting customer satisfaction.
Competition: Competition is an issue for many businesses. It can be especially harmful to supply chain management as new companies may emerge with innovative technology that helps them run their supply chain more efficiently. Businesses can gain a competitive advantage by improving collaboration, focusing on goals and bigger issues, doing their best to manage costs, and making the right investments.
Technology adoption: Businesses may be tempted to invest in new technology that they think will make supply chain management more efficient. But, investing in the wrong technology can be a considerable setback. Furthermore, adapting to new technology can slow company processes even if it is a step in the right direction.
Security: Security is a common supply chain management challenge. There is a risk that companies may be hacked into as they increase their reliance on cloud-based technologies. Physical products can also be stolen. Companies can decrease risk by thoroughly vetting vendors, creating contracts with third party companies, and increasing their cybersecurity efforts.
Regulatory compliance: There are a variety of regulatory requirements in place, and it can be challenging for businesses to meet compliance guidelines. These include national, state, and local guidelines, industry standards, trade agreements, contractual obligations, customer expectations and non-government organization expectations. Companies that take a multifaceted approach that includes setting standards, employee training, reporting, and testing will meet compliance regulations, so they maintain good relationships and don’t face legal issues.

Pros & cons of supply chain management

Supply chain management comes with its share of pros and cons as follows.

PROS

Lowers costs: Supply chain management involves making processes more efficient and cutting back on costs whenever possible. Ideally this lowers expenses, thus contributing more to the bottom line.
Improves customer satisfaction: The supply chain management process ensures customers receive quality products in a timely manner. This boosts customer satisfaction and retention.
Gives a good handle on inventory: Inventory plays a key role in supply chain management. When companies are on top of their inventory, they are better able to fulfill orders and turn a profit. They can also protect themselves against shrinkage.
Helps navigate disruptions: Healthcare crisis, climate events and other factors can cause disruptions to the supply chain. A smart supply chain management system will keep companies afloat despite disruptions.
Enables growth: A smart supply chain management plan backed by the right technology and operational planning will help your company grow and rise above the competition.

CONS

Businesses face challenges when trying to globalize: Businesses may source goods from out of the country to save money. Unfortunately, this also leads to increased shipping times and difficulties with storage and logistics.
Competition: New businesses may come along who are adapted to new technology that helps them manage their supply chain more efficiently than companies using older technology. This can pose a threat to existing companies that are struggling to keep up.
Security: Cybersecurity is an ongoing issue for people that are moving their technology to the cloud. Physical products can get stolen as well.
Compliance issues: Staying compliant can be costly and confusing.
Technology adoption: It can be difficult to find the technology that is best suited to your software management needs. Make a poor investment, and it could be a major setback.

Why supply chain management is important

Supply chain management is so important for so many reasons. From delivering a better customer experience to driving profits, supply chain management impacts internal and external operations. Some small businesses or startups may plan to refine their supply chain management as they grow, but this is truly a mistake. No matter how big or small your company is you should make a conscious effort to execute effective supply chain management at all times.

How Kickfurther can help

The ability to fund more inventory will call for efficient supply chain management. Companies often hit a point where they are growing, but struggling to keep up. By accessing funding for inventory you can keep your company growing without suffering financially.

Closing thoughts

Supply chain management will help your businesses survive and thrive in a competitive marketplace. Earning business is about so much more than just having a great product. Create a company that’s easy to deal with, empathetic to customer needs, and always hungry to be the best. If you operate with these goals in mind, we’re sure it’ll just be a matter of time before you need inventory funding to keep up with sales.

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

Learn more about Inventory Financing for the Supply Chain.

How Inventory Management Can Improve the Customer Experience

Posted on January 23, 2023 by Kaylyn Perry

Inventory management plays a big role in customer satisfaction. Inventory management should be designed to monitor product availability, but thanks to advanced technology, it can do so much more than that. Inventory management can tell you when to reorder products, help fulfill orders faster, identify what’s selling fast, and so much more. All of the benefits of inventory management can improve customer experience which will drive sales at the end of the day. While you may need to invest in inventory management, it’s a worthy investment. To free up cash to improve inventory management systems you may need to get funding for inventory. Keep reading as we explore inventory management and inventory funding.

What is inventory management?

Inventory management is the process of ensuring you have enough inventory to sell while maintaining cash flow. It involves tracking inventory from the manufacturer to the point of sale. The purpose of inventory management is to ensure the right products are at the right place, at the right time. Furthermore, it allows businesses to ensure they always have enough inventory on hand.

Inventory management involves the following:

Keeping track of inventory so you know how much of each product you have in stock.
Ordering more products to keep up with demand and cutting down on products that aren’t selling as well.
Making sure you have backup plans if you are low on a product that’s in demand. For example, you may have a variety of wholesalers you use so if one is out of a product you need, you can order from another supplier.
Managing inventory from raw materials to finished products.
Efficiently streamlining inventory to avoid shortages.

Why is inventory management important?

Inventory management is important for a variety of reasons including the following:

Inventory management and customers: The main reason inventory management is important is it increases customer satisfaction. If you are on top of your inventory you will be less likely to sell out of products or promise an order that you can’t deliver. This means customers will get their products without having to wait for backorders. It will also make them less likely to go to a competitor for the products they need.
Helps grow business and reputation: Keeping track of your inventory will help you determine which products are selling and which are not. As a result you can invest in the products that sell and spend less on the products that don’t. This should result in higher income and reduced loss so your business can be more profitable overall.
Minimizes shrinkage: Shrinkage occurs when items of inventory exist in accounting records but are no longer present in the actual inventory. This is typically due to clerical error, damaged goods, or theft. Inventory management helps companies account for shrinkage. It allows them to identify the source of shrinkage so it’s less likely to occur.

Types of inventories

There are several types of inventory a company can have. They will vary depending on the type of goods you sell, but can include the following.

Finished goods: These are finished products sold to customers.
Raw materials: These are the materials used to make finished goods.
Work in progress (WIP): These are unfinished goods that have not made their way through the manufacturing process.
MRO goods: MRO stands for maintenance, repair, and operating. MRO goods refer to the inventory used to support the manufacturing process.
Safety stock: This is the additional inventory a business keeps in stock to deal with supplier shortages and increases in demand.

How does inventory management influence customer satisfaction?

Inventory management influences customer satisfaction in several ways such as:

Fulfillment of orders: Inventory management ensures orders are fulfilled so customers get their items quickly and don’t go to another company for the goods they require.
Customer service: When warehouses are well organized and products are in stock, goods can be shipped to customers quickly, providing a high level of customer service.
Seasonality: You must consider seasonality in your inventory management processes. For example, you may want to increase your stock on summer items when temperatures heat up and order more winter items when temperatures drop. Upcoming holidays will also dictate which items customers will want to be purchasing from your store. Having the right products when you need them will help capture more sales while delivering what customers want, when they want it.
Preventing stock-outs: A stock out occurs when a customer orders a product, and the company realizes that they don’t have it in stock. They must then tell the customer that the item isn’t available and refund their money or put the item on backorder. Stockouts can negatively impact a company’s reputation and reduce customer acquisition and retention rates.
Returns: An easy return process can greatly increase customer satisfaction. If a customer receives an item that arrived damaged, they may want to exchange it for a product that’s in good condition. If the company has enough inventory, they will be able to swap it out quickly providing a prompt return process that makes the customer happy.

How can inventory management tools help?

Once upon a time, inventory management meant companies had to count their products manually which was extremely time consuming and produced a high margin of error. Today, inventory management tools are available that make the process easier and more accurate. They can even automate inventory management accounting for products that are bought and sold in real time.

Tools that are commonly integrated into the inventory management process include:

Data analytics: Data analytics involves using real time data so you can scale your inventory up or down in a timely manner to boost profits and reduce expenses. Data analytics will also provide insight on trends and market opportunities.
Product Segmentation: Product segmentation involves categorizing your products according to characteristics such as market appeal, profitability, and supply and demand patterns. This will allow you to get a handle on when inventory needs to be replenished. It will maximize profits, reduce operational costs, and make your inventory management processes more efficient overall.
ABC Analysis: ABC analysis involves organizing products into categories depending on how well they sell. Products in the A group will be those that sell the best. Products in C groups are those that aren’t selling well. Products in B groups are products that are selling, but not as well as those in the A group. B group products should be monitored to see what group they end up falling into, A or C. ABC analysis ensures you are investing in products that sell and not spending money on those that don’t.

How Kickfurther can help

Part of an effective inventory management process is stocking enough inventory. Losing a customer or sale as a result of not having a product in stock once or twice may not be the demise of a business. But, when this happens on a regular basis it can be. Customers need to know they can count on a business. From an initial order to a return or exchange companies should keep enough inventory on stock to fulfill orders. Furthermore they should have an easy ordering process. With inventory management tools in place, customer processes can be simplified and fulfillment can be expedited. So how can Kickfurther help?

Closing thoughts

Inventory funding can free up cash flow so that companies can improve inventory management. It also ensures that companies have plenty of products to sell. At the end of the day, customers are the lifeblood of a company. Business owners should do everything they can to deliver unmatched service. Disorganized internal operations will reflect through customer experience. Businesses with organized and effective inventory management systems in place can improve customer satisfaction.

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

How to Value a Small Business When Selling, Funding, and Everything In Between

Posted on January 17, 2023 by Kaylyn Perry

There are times when your small business may need to undergo a valuation, such as when preparing to sell your company or start a round of equity-based funding. In all of these cases, getting this valuation done right is key to your future business success.

Why should you value your business?

Knowing the value of your business can help you make better business decisions and set realistic goals. It can also be used as a benchmark and is often required to obtain funding. Whether the valuation is for purely informational purposes or you need an official valuation to undergo a business transaction such as beginning a new round of equity financing or splitting the company in a divorce, it is important to know how much your company is worth. Keep reading for more detail as to why it’s so important to know the value of your business.

Reasons to value your business

There are a few main reasons why a company might undergo a business valuation, here are a few.

Preparing to sell: The most common reason for undergoing a business valuation is when you are looking to sell your business. A business valuation helps you determine where to set your listing price and estimate how much you can expect to receive if you do place your company on the market. You may even decide to hold off on selling your business in the first place.

Preparing for a merger: A valuation is typically needed when preparing to undergo a merger or an acquisition. In M&A transactions, oftentimes both the target company and the acquiring company will undergo a business valuation on the business that is being acquired.

Attracting investors: You need to know your business valuation when seeking equity-based funding, because it lets you (and future investors) know what the equity in your business is truly worth. Types of equity funding include initial public offerings (IPOs), angel investing, venture capitalists, and equity crowdfunding. Business owners use equity funding to finance business needs in exchange for an ownership stake in their company.

Offering equity to employees: Similarly, there are times when growing companies wish to offer equity to their employees as a reward, incentive, or bonus. You must undergo a business valuation first in order to know (and prove) how much equity in your company is worth.

Developing strategy: Whether you want to incorporate your business valuation into your business plan, financial projections, or other futurecasting – knowing where you are and where you have been can help you more accurately determine where you are going. Undergoing a business valuation also gives you a good idea of your company’s current strengths and weaknesses or areas of opportunity.

While these reasons are by far the most common, other reasons may include buying out the other owners, undergoing a change of ownership, a life event such as a divorce, or tax planning.

Tips on how to value your business

While many people hire a professional to undertake their business valuation, it can be done yourself. Either way, the following tips should help the process run smoothly:

Get your paperwork ready: Financial documents help back up calculations. Be prepared to demonstrate your company’s debts and assets through documentation such as profit and loss statements, bank statements, tax records, and balance sheets.

Determine future profitability: The easiest way to do this is by calculating net profit for the past few years and accounting for future revenue with average industry growth. Understanding your business value can help you track growth and set realistic benchmarks. You can also compare these benchmarks with your industry.

Estimate the value of your business: Use a few simple calculation methods to estimate the current value of your business. For example, the simplest valuation method uses the following equations: Gross Profits – Expenses = Net Income and Net Profit x Multiple = Value. To determine your “multiple” you will have to research the multiples that similar companies have sold for and consider the size and financial history of your business.

Know the different methods: Different appraisers may use different methods, and different circumstances call for different methods – so having knowledge of these may help you determine which valuation would be most favorable for your business. These methods include the Adjusted Net Asset Method, the Capitalization of Cash Flow Method, the Discounted Cash Flow Method, the Market-Based Valuation Method, and the Seller’s Discretionary Earnings Method.

Perform a market valuation: Just like when you are selling a house, market conditions and looking at “comps” are some of the most important factors when preparing to sell. A higher demand for businesses like yours can drive up your value, while slow growth and low interest in your field can eat into your final valuation. Ultimately, your company is only worth the price that buyers are willing to pay for it – no matter how good your financial projections are.

Create financial projections: Financial projections look at how much profit you are currently generating and produce an estimate of how much your company will generate in the future. Knowing these numbers will also help you determine the best times to raise capital and undergo a new round of equity-based funding.

Don’t forget intangible assets: While it may be easy to determine the value of a vehicle or large piece of equipment, don’t undervalue your business by selling yourself short. Intangible assets such as copyrights, patents, trademarks, client lists, SEO rankings, and even social media followings can all affect your final business valuation.

Tips for improving the value of your small business

In order to increase the value of your small business to get a better valuation, there are a few things you can do.

Run some models: An appraiser can help you produce a range of valuation models with different outcomes. For example, you can run the numbers to determine how more revenue per customer or higher churn would affect your future business valuation. This process will help you determine where to best focus your efforts.
Increase revenue: At its most basic calculation, your business valuation is determined by your profits. One of the best ways to improve your profits is by increasing your revenue, whether by making your prices higher or increasing your sales volume. An appraiser can also help you determine where to best focus your efforts to see an increase in revenue.
Cut costs: On the flip side of the coin, cutting costs can also help improve your profits even if your revenue stays the same. Can you downsize your retail location? Cut back on staffing? Decrease your marketing budget? Research where you can effectively cut costs without eating into your revenue.

How Kickfurther can help

Securing funding is not an easy task, but it’s something that most small businesses must do to maximize growth. You may jump through several hoops and qualify for traditional financing, only to find out it’s far too expensive. There’s also the case that you are just struggling to qualify for traditional financing methods. Small businesses are the heart of most communities, yet they often have the hardest time obtaining the funding they need.

Started by an entrepreneur who once struggled to find affordable financing – that was also attainable, Kickfurther was born. Kickfurther is the world’s first online inventory financing platform that enables companies to access funds they were unable to acquire through traditional sources.

So how does it work?

Kickfurther has companies start by creating a profile. Next, we connect brands to a community of eager buyers who help fund the inventory on consignment and give brands the flexibility to pay that back as they receive cash from their sales. Flexible repayment schedules alleviate cash flow challenges that are often made worse by traditional lenders. Small businesses can take advantage of flexible repayment schedules by allowing the brand to scale quickly without impeding your ability to maintain inventory. To qualify for funding through Kickfurther, brands must sell physical products or non-perishable consumables. In addition, brands must have revenue between $150k to $15mm over the last 12 months. Our average funding amount is $78,000, but businesses can fund up to $1MM to manufacture new inventory or get reimbursed for current stock.

Closing thoughts

Whether you need to know your business valuation or not, you SHOULD know it. A successful business is efficient, organized, and always has a plan. As you set out for any type of funding, the lender, investor, backer, or source of funds will need to trust your businesses ability to succeed. Backers within the Kickfurther community definitely enjoy connecting with brands, which they can do through business profiles. With 800+ opportunities funded and a 99% funding success, you can get the funding you need at Kickfurther, but you will need to put in a little bit of work. The opportunity to get funding through Kickfurther means the opportunity to save money while growing your business. At Kickfurther our rates are up to 30% cheaper compared to other forms of funding. Furthermore, companies that return for additional rounds of funding often see their rates fall each time.

Interested in getting funded on Kickfurther? Create a free business account today to get started!

How Fashion Brands Can Optimize Inventory Season to Season

Posted on January 17, 2023 by Kaylyn Perry

With trends constantly changing and seasons coming and going, stocking the right amount of inventory is tricky. While new fashion retailers may have a learning curve, with some time you can get inventory supply and demand down to a science. While some pieces will sell better than others, and you won’t always be offering the same products all the time, over time you will learn what sells best. Comprehensive reporting, customer behavior, organized inventory systems, and other resources can help you stay in control of inventory and finances too. Investing in resources and technology while trying to stock inventory can cause a cash flow strain. To free up cash flow, you may need to use inventory financing.

What is inventory optimization?

Inventory optimization is the method of best practices for balancing cash flow and inventory. It’s the process behind maintaining adequate stock to meet customer demand, but never miss a sale, delivering the best customer shopping experience, avoiding inventory problems, and keeping costs down. Seasonal optimization takes current market conditions and trends into account in combination with historical data to forecast consumer demand.

Why inventory optimization is important for fashion brands

Inventory optimization is important for any product-based business or retailer, but it’s especially vital for fashion brands. Proper inventory optimization will help your company meet consumer demand, increase customer satisfaction, and avoid costly issues such as overstocking, understocking, supply chain issues, and backorders. Inventory optimization is achieved through a combination of tools, technologies and best practices such as real-time product tracking and demand forecasting. Below are some tips to help you optimize inventory from season to season.

Tips to optimize inventory season to season

To make sure your retail inventory is optimized for each season, consider incorporating the following tips into your fashion business:

Utilize seasonal codes: Incorporating seasonal codes into your product taxonomy provides better visibility and insights in regard to inventory. Seasonal codes can allow you to see detailed metrics for each season or product type at a glance. As a result, identifying trends, tracking seasonal inventory levels in real-time, generating accurate sales forecasts, and making educated purchase decisions are easier. Be sure to also identify which products are top sellers every season regardless of the trends (such as a basic pair of black jeans) and track their performance year-over-year to optimize your inventory levels of those products over time.
Perform inventory analysis: All business decisions for all industries should be data-driven. Without proper analytics, even the best intended forecasting will fall short. Inventory analysis includes looking at historical data and trends, analyzing current market conditions, accounting for seasonality, calculating your profit margins, spotting poor-performing product lines, and identifying top-selling products. Inventory analysis allows you to make better purchase decisions and sales forecasts by adjusting for consumer demand.
Tag your merchandise categories and products: Maintaining a detailed product taxonomy with seasonal codes and product attributes is a great opportunity to learn more about your customers and identify sales trends. Clear merchandise categorization will help you track product performance over time and by type, better enabling you to optimize your inventory for each season. Each of your fashion items should be tagged with several key attributes such as color, style, size, material, sleeve length, and season. These distinctions increase visibility into the performance of your product lines and make it easier to track trends. With the right product tagging system, you will be able to quickly run reports to answer questions like which boot sizes your customers purchase most often or how many denim jackets you sold last fall.
Use data intelligently: Once you’ve begun to acquire massive amounts of consumer data and analytics, you have to know how to use this information wisely. The best data won’t do you any good if you aren’t incorporating it into your business decisions or sales forecasting. Basic inventory reports and sales reports should be a standard part of business operations. As should getting this data into the right hands of key people that make purchase decisions and run marketing campaigns.
Collaborate with suppliers: While you want the majority of your product lines to remain on-brand, there are times you want to experiment with offering new products or tapping into a new fashion trend. When you aren’t yet sure how a particular piece will sell, this is the time to collaborate with your suppliers on creative solutions. You could request a smaller minimum order quantity, purchase new product lines under a “sale or return” agreement, or ask suppliers if they would be willing to provide free samples.
Season to date sell through: Sell-through reporting is typically performed on the first day of each month to track sales performance from the previous month. Season to date sell through allows you to see the % of stock you have sold since the start of the season. This data can then be used to help you track the success of your marketing campaigns, identify which products to target for promotion, spot under-performing product lines, and identify which pieces to include in your next order from suppliers.
Loyal shopper discounts: Having a discount program allows your customer base to build brand loyalty and encourages repeat shopping. The more return customers you have, the more data you can build on your target customer and their typical purchases. Once you have this data, it allows you to make informed decisions as well as market directly to your audience with targeted email campaigns and other tactics.
End-of-season sales: Properly timing your seasonal discounts allows you to liquidate remaining seasonal inventory and clear the way for the next season’s items. Another helpful tactic is to begin your seasonal discounts mid-season. While you cannot always predict which product lines will perform the best, you can identify slow-moving products early enough in the season to slash the sales price and hopefully get them moving out of your inventory.
Seasonal social media promotion: Keeping up with promotional opportunities through targeted social media campaigns can increase sales, thus helping you move more product. This can be especially resourceful if you feel you’ve overstocked on certain items. You might not have the right buyers coming in your door now, so find ways to reach them. You can also try running digital ads to boost sales and drive traffic to your website. Be sure to begin promoting seasonal items in keeping with current trends, allowing your customers plenty of time to get the pieces they need.

How Kickfurther can help

Optimizing inventory is no easy task. However, once you find the formula for inventory optimization, you may fall short on cash to stock inventory. While finances are a top priority for companies, and borrowing money costs money, it’s perfectly normal to need outside funding. Outside funding may cost time and money, but it’s a worthy investment if managed properly. Small businesses often struggle to find affordable and timely funding for inventory funding, and this is where Kickfurther comes in.

Kickfurther is the world’s first online inventory funding platform that enables fashion businesses to take their dreams from their closet to the runway. If you’ve been struggling to obtain financing through traditional sources, Kickfurther will be the light at the end of the tunnel (or the beginning of a whole new tunnel) you’ve been searching for.

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% lower cost 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.

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

How much money do you need to start an Amazon business?

Posted on January 10, 2023 by Kaylyn Perry

The most successful Amazon sellers have started with various investments. What will drive sales is having the right product for the right price. Once you’ve figured out what sells, you’ll need Amazon business money to create your own success. So, how much money will you need? Where can you get money to start an Amazon business?

How much does it cost to start an Amazon business?

Using the power of amazon to start a business and sell your products to a global market is an incredible way to generate revenue and make a profit. There are new Amazon businesses being created every day selling and/or dropshipping a variety of consumer products. Some successful Amazon sellers started with as little as $500 while others started with over $10,000. Startup costs will depend on a variety of factors such as your product cost, fulfillment, office space, and so forth. Some Amazon sellers start their business from home and quickly grow into a warehouse. Before stocking up on inventory, be sure to do some trial and error to find what will be the most profitable. There are several tools that can help you identify Amazon opportunities in terms of what is selling and what is not. If you’re looking to start your own Amazon business, there are some costs that you will need to consider while you are brainstorming your business idea.

Here is a quick breakdown of some of those costs.

Inventory costs: Inventory can eat up a large portion of your investment cash when first starting an Amazon business. It’s important to do your research to identify products that have the best chances of selling. It also may be a good idea when first starting out to invest a smaller amount of a few different products to experiment on which products are more likely to sell the quickest. Another important thing to consider when it comes to inventory costs is the cost of storage. Unless you have enough space in your garage, you are going to need to find a space where you can securely store all of your inventory while it waits to ship out to customers. Amazon does offer fulfillment and storage services, but they are not free. If you’re strapped for cash but have some established sales, you can turn to Kickfurther for Amazon inventory funding options. We will cover more detail later on.
Product photography: Selling on Amazon requires high-quality images. Some consumers may already be hesitant about purchasing a product online before they have had a chance to see it in person. Paying a professional photographer to take high-quality images of your products is instrumental to driving online sales. It is worth the investment.
Advertising: You will want to devote some of your investment funds to advertising when you are first getting your Amazon business up and running. You can advertise directly through Amazon which is highly recommended. However, you may not want to stop there. You are going to want to place direct links to your Amazon store or Amazon product pages on social media platforms, and third-party websites, invest in targeted SEO campaigns, and team up with affiliate site creators.
Supplies: If you’re planning on shipping out your Amazon orders yourself, you are going to need to invest in packaging supplies. You are going to need a variety of boxes of different sizes, packing tape, packing materials to protect your products during transit, shipping labels, and more. You can also decide to pay someone to act as your drop shipper for a percentage of each sale. They can store your inventory, pack your orders, and ship your products in exchange for a fee.
Shipping costs: Shipping is another cost you are going to need to take into account if you are shipping your products from your own location. However, much of the cost of shipping can be passed along to the customer unless you are looking to offer free shipping as an incentive to drive sales. If that is the case, then your shipping costs will eat into your profit margin. If you opt to use FBA you can offset some of the labor and supplies associated with shipping. FBA services are not free though so consider the cost.

What items impact the cost of selling on Amazon?

There are two main ways that Amazon businesses sell on Amazon. You can either be a Fulfilled by Amazon (FBA) business or a Fulfilled by Merchant (FBM) business. There are both advantages and disadvantages, including fees, either way.

Here is a quick breakdown of some of the additional costs of selling on Amazon.

Subscription fees: Amazon most likely will charge you a monthly subscription fee to host your business on their platform. If you are selling more than 40 items per month on the platform, Amazon may charge you a monthly subscription fee of $39.99. If you sell less than 40 items per month, then Amazon may only charge you 99 cents per item sold.
FBA fees: FBA has some major upsides. With FBA, you simply ship your products to different Amazon warehouses located throughout the country, and Amazon will process your orders and ship your products on your behalf. However, for this service, Amazon will charge you fees. One of the main fees you will incur is storage fees. Additionally, if any of your products end up not selling and they remain in an Amazon warehouse for more than a year, Amazon can begin to charge you even more.
FBM fees: FBM is what Amazon businesses do when they plan to store and ship their own products. The fees are much less and can mostly be covered by the monthly subscription fee, however, then you will be responsible for covering your own shipping and storage costs as well as the cost of packing materials.
Customer return fees: Any time a customer elects to return an order, whether it is through FBA or FBM, you are likely to incur additional charges as well as refund the customer.

Tips for saving money when starting an Amazon business

No matter what kind of Amazon business you decide to open and no matter what kind of products you decide to sell, you’re going to need some upfront investment capital to get started. On top of that, you’re going to want to ensure you have a steady monthly revenue stream from your business to help cover operating costs and future investments in inventory and advertising.

When you first start out, you are also going to want to find as many ways as you can to help save money and reduce costs.

Here are some of those ways that other Amazon businesses have found effective for saving money.

Get an Amazon Professional Seller account: Even if you do not know how many sales you will be doing each month on Amazon when you first start out, it may be a good idea to just go for the Amazon Professional Seller Account right away. For $39.99 per month, you can have unlimited listings, an unlimited number of sales, as well as access to other features that can save you money long term.
Choose a product(s) that will sell: During the brainstorming phase of your new Amazon business, it’s important to do diligent research to identify products that have a good chance of selling and that may have less competition than others. You will want products that can move quickly to avoid paying additional fees on top of storage and shipping costs.
Choose a smaller product: If you can, choosing a smaller product can help you keep packaging and shipping costs to a minimum. Larger products, although often can be listed at higher prices, also come with higher shipping costs and it is more expensive to package them. On top of that, larger products have a higher chance of becoming damaged while in transit.
Negotiate shipping costs: If you’re planning to ship out a larger number of products each month, by choosing to work directly with one carrier, you can negotiate discounted shipping rates that you can pass on to your customers or add to your profit margin. Working directly with a USPS, UPS, or FedEx account manager is an excellent way to use your proven and anticipated volume to lock in below-market shipping rates.
Consider inventory financing: By using inventory financing, you can get access to short-term loans or a revolving line of credit that you can use to purchase the inventory you need for your new Amazon business. To secure the loan, often the inventory purchased is used as collateral. Inventory financing is a great way to invest in your business while maintaining a higher level of working capital.

How Kickfurther can help

Selling on Amazon is all about having the inventory to sell, and at a lower price than your competitor. As your business grows, it may be hard to keep up with inventory demand. Amazon sellers often use inventory funding, but it can be expensive. Luckily, with Kickfurther you can get the funds you need without the hassle or unnecessary markups.

Closing thoughts

The first step toward being a successful Amazon seller is to get started. Whether you’re selling your own product or selling other brands, do your research and dive in. As you start seeing some success, you may need help funding inventory.

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

Learn more about Amazon inventory financing options.