5 Ways Inventory Management Software Increases Profitability and Sales

  inventory management

increase profitability

A study performed by Entrepreneur Magazine found that businesses can increase their profitability by as much as 50% by using inventory management software to manage their business. The benefits an inventory management application provides to the day-to-day operations of a business far outweigh the costs of purchasing and learning how to use it. Inventory management software also provides actionable insights regarding your customer activity, as well as orders, sales, and delivery information. In fact, inventory management software is one of the best ways to increase your business’s profitability and sales. Here are five ways inventory management software increases profitability and sales:

1. Controls inventory in a highly effective way

A common challenge among manufacturers, wholesalers, and B2B companies is to maintain the level of stock at a profitable level. More often than not, businesses find themselves spending too much money on excess inventory due to poor inventory management. If not corrected, this can be detrimental to your long-term profitability.

Overstocking goods means having too much money tied up in inventory, which negatively affects both a business’s cash flow and its profitability. However, understocking goods is also a problem. When a company has shortages of a certain product — especially if it’s in demand — they will miss out on sales because their customers end up looking elsewhere to buy those products.

To gain better control over your inventory, you need high-quality inventory management software. It can help you prevent both overstocking and understocking of your goods by providing you with increased visibility over all your stocks. Using the software, you can get accurate real-time access to inventory information at any time no matter where you are. This means you can easily keep an eye on the levels of goods. You can even set up alerts to let you know which of your stocks are running low so that you can replenish them before they completely run out.

Inventory control is not just about stock levels as an inventory management software can also provide you with a comprehensive view of your inventory. You can look at other things such as the specific stocks at different locations, the weight of the goods, the size dimensions of the goods, and a host of other attributes. It allows you to customize reporting and select specific stock details you want data on.

2. Reduces unnecessary business expenditure

One of the more significant expenses of your business is undeniably its staffing costs. Inventory management software acts as a tool to streamline your business processes. You no longer need to employ multiple IT or accounting personnel to run various systems because these functions are all taken care of by a single inventory management software.

Unnecessary business expenses due to human error can also be avoided by using an inventory management software, which integrates with technology that automatically and accurately updates your inventory data. The use of a proven software maximizes accuracy which is essential when it comes to inventory management. This reduces the risk of losing profits over something that can be prevented.

3. Improves order fulfillment

Order fulfillment refers to the movement of your goods, from the point you receive an order, right up to the moment they are delivered to your customer. Here’s how the process goes for most wholesalers and manufacturers.

  1. You receive the order from your customer (via phone call, text message, email, etc.)
  2. You enter the order into your system.
  3. You notify the customer that you’ve received the order.
  4. You send the order to the warehouse that has those specific goods available so that an employee can pick the order.
  5. The order is prepared for shipping, then shipped to the customer’s preferred address.
  6. You notify your customer that their order has been shipped and is on its way to them.
  7. Your customer receives the order.

Plenty of businesses, especially smaller ones such as start-ups, still prefer to do this entire process manually because they think it saves them money. However, as previously mentioned, this isn’t true at all. Manual work creates room for error, and with errors come unexpected costs.

To make order fulfillment more efficient and maximize sales and profitability in the process, you can turn to an inventory management software.

Inventory management software should provide you with a real-time view of each and every order, as well as what stage of the process the order is in. You can check whether an order has just been received, shipped, or invoiced. It eliminates tedious manual data processing and replaces it with automatic data updates. Inventory management makes your workflow more efficient by centralizing all the data so you can track orders, prepare invoices, send customer notifications, and accept customer payments within one system.

4. Facilitates growth

Planning for the future is one of the most important tasks of a business owner. You need to think about growth, but you also need to consider potential lean times, especially if you sell or manufacture seasonal products.

With inventory management software, you can easily plan for your growth and scale your business the right way. As your business develops, enters new markets, and diversifies its products, inventory management software allows you to scale depending on your business needs. You can scale profitably without having to worry about spending on upgrades to your systems.

Dona Chai, a US-based company that sells tea concentrates, used inventory management to grow their business and increase their sales. When the company first started in 2014, they were a small company that experienced difficulties related to managing orders while relying on several inefficient systems. At the time, these challenges limited their ability to serve more than a handful of clients and grow.

By eliminating all of their old systems and using just one inventory management system, Dona Chai was able to save 80% of the time they initially used to manage their orders. It went to just five hours a week, from 25 hours. The company grew their business by 50% in just six months, and they now sell to more than 800 establishments throughout the US.

5. Enhances customer experience

When it comes to manufacturing or wholesale, it literally pays to keep existing customers happy. Businesses have about a 60% chance of selling to existing customers versus a slim 5% chance of selling to new customers.

Maintaining the loyalty of your current customers is critical because they will be more recommend your business to other businesses, and therefore provide you with new customers.

So, if you want to keep your customers happy, one thing you can do for them is to make buying from you easier and even enjoyable. How do you do that, you ask? The answer is simple: use inventory management software. The great about the tool is that it isn’t just for your company’s benefit, but also for your customers.
Inventory management software is integrated with technologies that make it more convenient for your customers to order from you and pay for the products. Integrations like ShipStation streamline the order process, automatically notifying your customers regarding the status of their shipments and providing them with tracking numbers.

In addition to that, Shopify and Stripe give your customers the means to make secure online payments, removing the hassle of having to mail out checks.

Lastly, some inventory management software also features a B2B portal where wholesalers can allow customers to check their order status and make new orders.


Looking for a tool that can help you increase your business’s profitability and sales? Then look no further than Sweet Technology’s inventory management software. Its smart capabilities can help you avoid unnecessary stock and staffing costs. It also prevents you from experiencing stock overages and shortages by providing you with more robust control of your inventory.

Our technology is also integrated with other software like Shopify and Stripe that can help drive your profits by improving customer experience. These integrations provide your customers with more convenient as well as more secure payment options, which can help to ensure that they pay you on time, every time.
To find out more about how Sweet can help you, request a free demo today.

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