The Art of Small Business Inventory Management: Balancing Customer Favorites with Business Sustainability

Ever wonder why a product may be out of stock? Or why we not longer carry a particular brand? Or how we keep up with all the products we stock in-store and online? I'm Holly, the founder of Wildcraft, and I'd like to to give you a behind-the-scenes glimpse at how we balance our customers' favorite products with the sustainability of our business! It's a challenge we enjoy, and it's a delicate balance that requires meticulous planning and management. 

Weekly Budget Management

Our buyer, Caroline, manages our weekly budget to ensure consistent inventory replenishment. And let me tell you, she's fantastic at it! Our buying budget — called "open money" — is based on the cost of goods sold (COGS) from the previous week. Meaning, if we'd have a busy week — awesome! We'll have lots of inventory that we can replenish the next week. But if we'd had a slow week (or month! or quarter!), that means we have less cash to spend on restocking your faves 😔. That is one reason you may see an "out of stock (OOS)" sticker on a product (or the "sold out" sign online) — we've had to push its replenishment to a week when more cash flow or open money comes in. 

Another resason you'll see an "out of stock" sticker on a product is because we sold through it much quicker than anticipated (for example, because of a current popular social media trend or someone's filling bachelorette gift bags!). Then we're queued to order a higher quantity next time, so we don't run out before our next buy! That is our goal.

And many times, a product is actually backordered from the brand (common with our makeup brands), so we are unable to get it to share with you. That, or the brand may be taking longer than normal to fulfill and ship our order. It's an ebb and flow that is under constant scrutiny!

At the same time, we are determining which brands get replenished first. It's based on bestsellers that are in most demand and top brands that are getting low in inventory. To give you reference, we currently stock over 720 products and over 115 unique brands!

Quarterly Audits

Quarterly audits are another important part of Wildcraft's inventory management process. We take a close look at our sales data and inventory levels to identify trends and patterns. This helps us make informed decisions about which products to keep, which to discontinue, and which new products to introduce.

And then there's the churn rate. Ah, the churn rate. It's a fancy term for how often we sell and replace our inventory. Which ones are flying off the shelves and which ones are, well, not so much. It's a tough decision. A high churn rate is good, it means we're selling the product (or brand) quickly and efficiently. A low churn rate, on the other hand, indicates that the product is sitting on our shelves for too long. By monitoring these rates, we identify the slow-moving items that need to be discontinued.

It's a meticulous process, but it's essential in maintaining a healthy balance between customer demand and business sustainability.

Balancing Customer Favorites with Business Sustainability

One of the greatest challenges in inventory management is balancing the desire to stock customer favorites with the need to maintain a healthy business and not overextend ourselves. I want Wildcraft to be profitable and not take on unhealthy debt. While it's our goal to keep popular items in stock for you, we can only keep products and brands that are moving well for us. 

And this can be frustrating! Especially when you come in and something you love is no longer at the shop. We genuinely love every product and brand we bring in, so it makes us sad, too. When this happens, our goal is to always have a replacement option that you will love just as much! 

Over the years, I've learned that every product has a life cycle that must be honored for us to continue to keep our doors open and be profitable. By maintaining this balance, we can continue to offer the products you love while ensuring the long-term sustainability of Wildcraft.

By sharing our behind-the-scenes approach here, I hope to provide you some insight into the meticulous work that goes into keeping Wildcraft stocked with the products you want and love. We don't always get it 100% right. Just know that we work very hard for you, to continually grow and be better, and you are always top of mind for us!

Please continue to shop small and locally. Thank you for your continued support and we love you!

"So, whether you eat or drink, whatever you do, do everything for the glory of God" — 1 Corinthians 10:31