Question: I am setting up my online hair extension business and I have found a really good supplier but I am not sure how to manage my inventory in the most cost effective way. Do I order a range of styles and lengths and have stock with me which could be quite expensive or do I order stock from my supplier when customers make an order from me. I have seen hair businesses often have processing time of 5-7 days. Is this because of the stock/inventory management?
Answer: To keep a stock that has all the products you offer might cause cash flow problems. Especially if the turnover rate is low. If you have too much hair in stock this will limit the growth of your business. To start make sure you keep record of your inventory.This will learn you over time the required level of stock. Also better to check for hair extensions suppliers who are able to keep enough hair in stock themselves. This will reduce your own stock. Another option is to look for a hair supplier that offers dropshipping. See our newsletter for more details. This will enable you to have a low stock but to offer all the hair your clients are looking for.