What is the level of inventory I should keep
A returning question on our email consult is what is the level of inventory I should keep? Of course you do not want to put all your money in your stock. No problem if you have a high turnover rate (for example what you purchased yesterday is sold today) but it can kill your business and passion, if your money is piled up in beautiful hair extensions, but nobody is buying. You do not want to feel like Scrooge McDuck in a warehouse full of hair, do you?
How to calculate your minimum level of stock
To calculate how much inventory you need, you have to analyze a couple of things. First of all how are the delivery conditions of your supplier? In case they offer next day delivery, you can afford to keep a low inventory. But do they always have all the required textures or inches available? If this is not the case you could decide to find a second supplier or to keep extra inventory for these specific extensions.
If your supplier needs more days or even weeks before they deliver, you need to have some stock in the house in case your clients want to purchase the hair. But how much? For this you need to develop a crystal ball over time, you need to predict future orders! Easier said than done? Not easy but it can be done!
How to predict future orders
There are three things you need to develop to have the right insight to predict the level of inventory needed.
Keep your focus
And do you really need to sell everything that is available on the hair extensions market? If you focus on some specific extensions you can become the expert and distinguish yourself from the others even from big shops that do sell everything. This will also reduce the items you need to keep in stock. See also our post on the right number of extensions to keep at hand.