How to Make Your First Inventory Order for Your New Business

You've just started your own business, and now you're excited about taking that first step and ordering a wide array of inventory for your customers to choose from. Ordering inventory for a new business can be one of the most exhilarating parts of opening a new storefront, home based business, or online venture. However, if done incorrectly, that first inventory order can lead to a long-lasting downward spiral that eventually leads to the demise of your new business. Those first sales are crucial to the survival of any new business, and with limited funds there is little room for error. For advice on how to make your first inventory order for your new business without falling into the traps of over-ordering, under-ordering, or ordering the wrong products altogether, read on.

Most small business owners are starting out with limited resources. Make the most of your funds by concentrating on ordering products that are most needed, as opposed to the most trendy or chic. Why? Because if you do not have the essentials in your area of expertise, you don't have anything. If you sell cosmetics and have dozens of boxes of one popular eye shadow shade but almost no foundations (a very basic item), you will have little to offer the 90% of your customers who don't necessarily love that eye color shade. If you sell cooking supplies and have plenty of the newest fondue set to offer but few basic pots and pans, you have turned yourself into a fondue set company rather than a cookware company with many different, useful products to sell. You're beginning to see the point now. Fight the urge to buy products that are trendy right off the bat, and stock up first on your essentials.

One of the biggest mistakes new business owners make when ordering inventory for the first time is believing that all of that first order must arrive in one large shipment. In fact, savvy small business owners know that the first inventory order for a new company can also come in intermittently during that first month after a small customer base is established that can be catered to. As you already know, the success of any small business initially depends upon word of mouth. Taking care of your very first customers will ensure that new customers keep walking in on down the road. That means you must order for them first.

But how can you know what the customers want before you even open up for business? While you can estimate the needs of your average customer beforehand, you are essentially "ordering blind" before you actually open your business. What you can do to avoid this problem is order the basics first along with a small supply of trendier items, as mentioned earlier, and survey your customers as they come in about what they'd like to see in in your new inventory base in the future. What did they like? What was missing? What would complement what they just bought? It's a great idea to even sell out of inventory catalogs that your customers can have a seat and flip through to ensure that everyone has a chance to not only get what they want, but also to ensure that you have it in-store for their convenience next time. Open the doors to your business, see what your customers love, and then go for the riskier inventory orders. Also, order just enough to satisfy the needs of your first customers and a few more, especially if your products have a limited shelf life. While your business is still new, you must balance your supply with your actual demand carefully. Anticipate growth, but do so modestly and realistically.

Finally, let your customers restock for you. Let's assume you have a 50% markup on each product. That means that for each item sold, you can buy two more. So do it! That is, at least on products that are actually moving off of the shelves. If you have been in business longer than five minutes, you already know that you won't be actually turning a real profit (money that can actually go to your bank account) until your store is completely stocked. However, you can stock that store more quickly by marking up all products at least 50% and devoting your extra cash from sales to creating a widely varied inventory base. If a product is hot, replace it with two more. If it took a while to sell a certain product, let customers who love it order it as needed from your catalogs and replace it on the actual shelves with something better. Move inventory around as needed, and let your customers pay for most of the restocking. When viewed in that light, buying inventory for your new business won't seem nearly as daunting.

Remember, buy the basics first, survey your customers, allow patrons to shop from your inventory catalogs, add greater variety and trendier items immediately thereafter, and let your customers pay for stocking risky items. Ordering inventory for the first time for your new business is a rewarding experience, but play it smart by setting ground rules and letting your customers let you in on what's in demand.