In the events industry, there are a variety of ways rental businesses can profit. One of these ways is by operating efficiently and reducing the cost of your rental inventory. People always have to keep in mind the cost of inventory, but many companies have not fully grasped what it means. This article discusses inventory management & some of the common steps that can help reduce rental inventory costs, which may include buying additional storage space, investing in event rental software, and more.
What Is Inventory Management?
Inventory management is the process of tracking, updating, and controlling the number of products on hand. As rental inventory is typically one of the biggest investments in any rental company, it’s important to optimize this cost with great care.
It helps to reduce the cost of rentals by preventing costly mistakes and minimizing the amount of time it takes to track and maintain inventory. It is a useful tool in managing rentals because it can provide clients with a list of what’s been rented, stay updated on inventory levels, and find out how much needs to be ordered or subrented before an event.
On the other hand, you can also streamline your cost of rentals with online event rental business software like Rentopian.
Why Do You Need to Track Inventory?
The first and most obvious reason to track inventory is so you can keep track of your assets. Here are some other reasons:
1. Tracking the value of your inventory is important, as it helps you manage your cash flow. A failure to accurately track the value of inventory can result in loss of assets, as well as a loss of tax deductions.
2. Inventory items also need to be managed from a business perspective from a financial standpoint. Purchasing items for the purpose of having them sit around and not being used is a bad idea, as you are simply wasting your time and money.
3. In the same breath, inventory items need to be managed from a management perspective as well.
4. From a legal perspective, the management of inventory is also important. Keeping accurate records of inventory can help to reduce the risk of lawsuits. If there is a lack of records, it is difficult to prove whether items were purchased or not.
Types Of Inventory Management
Inventory management can be one of the most expensive areas of owning an event rental company. It is important to keep your costs down, which means you need to keep inventory at or below the rentable levels. There are two basic types of inventory management: active and passive.
1. Active inventory management includes things like buying in bulk, using revolving stock, and searching for vendors with large discounts or free shipping to subrent or purchase from.
2. Passive inventory management includes things like ordering in advance, reserving items on your website, and selling out-of-season items.
Inventory management is a more effective way of reducing the cost of rentals, as it helps alleviate some of the everyday woes associated with having inventory. There are many online software such as event rental inventory management software that can keep track of every product in your warehouse or showroom.
Suggestions To Manage Your Inventory
There is a lot of work and effort that goes into running a successful event rental business. Not only do you need to pay for overhead such as the warehouse lease, delivery vehicles, and employees, but you also have to deal with inventory management and countless other aspects of the business.
There are many ways you can reduce the time spent tracking your inventory, such as adding barcodes to all items or using an invoicing system that automatically sends out invoices when items get returned.
You can also reduce the cost of inventory by having your items stored in one location. A computerized inventory system is a great way to keep track of what inventory you have. It will allow you to easily track inventory using barcodes, automatically charging customers at the end of each month, and more.
Inventory management software can help reduce the cost of running your event rental business. It also gives you more control over your rental business. Inventory management helps ease the financial burden of renting by reducing or eliminating expenses without sacrificing sales. For a free online demo of Rentopian, the all-in-one event rental software, contact us today to get started.