Problems with business when becomes bigger

[claymonet112]

Hi, everyone. I've joined our forum in about 1 or 2 months. Last year I've come up with an idea about doing plant business which I only sell small plant for house decorating purpose
The business is quite good at the beginning, from a small store, after 6 months I could rent a bigger store in the urban zone.
But when it comes to being bigger, everything seems to be more complicated. At this time I got 2 physical stores and I've just opened a new online store, which is created by Magento platform.
The problem comes when the warehouse is nearly out of stock (usually on the weekend). Physical stores would sell until the warehouse is empty but the online store is still continuing receiving order. Because physical and online store both share the same warehouse. So online customer usually complain about having to wait too long until stock is refilled.
I find some solutions to solve my problems but because my business is not big enough so some (e.g: SAP) are quite expensive. Can you suggest me some affordable solution for my business
Thank you in advance, very very much

 

[kev598]

I think that you've already know the approximate or exact amount that you sell in a week or in a month. You can just order more items on Thursday, Friday, the amount that wouldn't be hurtful for your profit, and cover all or at least most of the online orders. If it is expensive for you or there is not enough storage at the warehouse, you can either place half of the plants at the shop, or to put them at home. There is not so much choice when it comes to money or expanding. Also you can try to find an investment. I listed obvious things, but you should try some of the options in order to understand what will work for you.

 

[claymonet112]

Actually, I tried the over-order method before. It's quite good. But the online customer's favor change all the time, then at this time this sodt of plant is sold out quickly but just 1 month later, they changed into another. So my online customer didn't complain about waiting the good to be refilled if it's showed initially, they just complain when they ordered and paid for the invoice then my staff call them and said sorry.
You're right, there is so much choices Maybe i should find an investment
(and sorry if my english is not good enough)

 

[S2K]

Firstly congratulations for expanding the business so quickly.

SAP, as well as all other ERP systems, is not necessarily the answer to your problem. Of course, you read on the internet how good these systems are at stock management and indeed they are good but only with a human brain behind them. The implementation process is critical.

You will need to implement one at some point but that depends on the size of your business and its complexity. There are cheaper systems than SAP. The licences are not the most expensive items in the process. The implementation is, as these are not off the shelf systems. I've implemented two ERP systems so far and I had to change the consultants at each implementation because they were not good. I've learned that cheaper isn't good here and I had better traction when I paid the consultant £1,000 a day instead of £500 that I was charged by the original one. You mentioned about Magento, which is great because many ERP systems can be integrated with a website on Magento platform.

As for the stock issue, I recommend you to have a buffer inventory system in place. You will need to monitor the order levels constantly (you can do this with a good accounting software although you may need to purchase an add-in) and reorder at the right time. Expect to over stock items on promotion, if you have any.

 

[claymonet112]

@S2K Could you tell me what ERP systems you used before, please.
Because I am researching about some brands who provide ERP system for small and medium business. They offer some an affordable price and a promising service
But because there's not to much review about them on the internet, so i don't know what to believe . I think if you paid £1000 or even £500 per day just for consultant, you must be have so much experience about this field. Thank you very muchhh

 

[S2K]

SAP One and Dynamics. Both were done on behalf of the companies I worked for at the time and they were implementations in excess of £100k each.

There are indeed a lot of ERP systems available and most of them follow the same architecture with only very few differentiations. Some have better reputation or they are "posh" and therefore you pay a premium for that. An ERP system implementation is a project in itself and doing your homework is very important. Don’t believe a thing that you see on the internet, not even the “independent” reviews. They all want to sell you their system by telling you how great they are. Then there are the consultants and finding a good one can be difficult. They come in and tell you that only the sky is the limit but when it’s about to do work most of them perform poorly. The best research is to contact companies that already use that system - any consultant could recommend you some. Go and talk to them. See the system live.

May I ask what’s your current turnover? I would suggest to start with something smaller for a period of time before you can think at SAP, Dynamics or something similar. Xero could be a good solution, it has a pretty good stock system and it can be fully integrated with your website.

 

[claymonet112]

After 2-day researching in the internet and consulting from your suggestions. I came up with 2 possible options which are: Xero and Magestore. Xero is quite professional, and have good reputation, and magestore seems more suitable with my scale of business, I am intending to choose the cheapest package
The reason I choose magestore compared to xero because as you said implementation is very important. Last year i bought 3 extensions from them so I can find their support team is very effective. So i am booking demo for their products (they call it omni-channel solution, not ERP system). After demo session hope i can make the right decision

 

[Noah]

After 2-day researching in the internet and consulting from your suggestions. I came up with 2 possible options which are: Xero and Magestore.

Good to see someone contributing back to the forum, reporting their own solution - thanks.