A startup can fail for a host of reasons. Lack of funding, low market interest and poor preparation can all lead to your demise. But would you ever expect that having too much popularity could put you under?
Sudden growth, paired with a poorly maintained inventory, can cost your company more than you realize. That?s why it?s vital to make sure you?re ready for success before you even hit the market. That starts with proper inventory management.
Inventory management can make or break you.
Good inventory management is the key to running a successful product-based business. Failure to meet the demands of your customers can have major long-term consequences, including the loss of sales and revenue, the loss of new or returning customers and the loss of a positive public image. Once you?re facing these issues, they?re awfully hard to shake.
An entrepreneur named Mathew Carpenter learned this the hard way. He started an online business called Ship Your Enemies Glitter where, for the low price of $9.99, you could anonymously send an envelope full of glitter to your worst enemies. When Carpenter?s site became an overnight sensation, he quickly found himself overwhelmed with orders. He pleaded with his customers to stop buying his product, but the orders kept pouring in. Carpenter fell so far behind that he had to sell the site just two weeks after launching.
Issues with inventory can be a great learning opportunity for a business. Soon after my company launched, we quickly ran out of one of our products that was manufactured in China. Inconveniently, this occurred during Chinese New Year and a worker?s strike at the shipping port. Our product was stranded for an extra two weeks — certainly not an ideal situation.
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