One of the most integral parts of your TCM business is inventory management. By effectively managing your inventory, you ensure you have the right herbs in the right quantity at the right time to meet your clients’ needs. Accurate inventory control is vital to maintaining the delicate balance between practice revenue and patient satisfaction.
The complexities of accurately tracking inventory can be a source of stress for both new and experienced TCM practitioners. It may take experimentation to find systems that work for you, but refining your processes ultimately makes it easier to focus on what matters most: keeping your patients healthy and happy.
Why Good Inventory Management Is Essential for TCM Practitioners
Numerous benefits come with having an effective inventory management process in place, including:
- Delivering superior service to your clients
- Simplifying day-to-day operations
- Reducing operating costs
- Preventing product shortages or surplus
- Avoiding unnecessary spoilage
- Optimizing use of storage space
- Providing accurate data for financial records
- Determining future orders with greater precision
- Improving contingency planning
The following best practices will help you maintain an optimal herb inventory and grow your TCM practice.
Choose an Inventory Tracking Method
Maintaining accurate inventory starts with establishing an effective method of tracking. In general, there are two options for inventory tracking: by hand or with a tool. Manual tracking with a notebook or spreadsheets can be an effective, low-cost option for small businesses or practitioners who are just starting out. For larger businesses, investing in a digital inventory management system can save time and effort while improving accuracy. Choose a method that fulfills your needs and that is easy for you to maintain.
Know Your Core Products
Sorting your inventory into priority groups can help minimize the risk of overstocking or understocking your herbs. Identify your top-selling formulas and be sure they are reordered regularly. Depending on your practice, you may require a consistent supply of formulas for general wellness or a regular stock of formulas for a specific area of focus, such as women’s health or sports medicine. KPC aims to make stocking your practice with essential herbs simple. If you’re not sure which formulas you need, our expert in-house herbalists can recommend a bundle to get you started.
Understand Your Clientele
TCM practitioners need to know more than the type of herbs that sell best in their practice. They also need to know which formats their clients prefer. KPC products are available in three formats: granules, capsules and tablets. No form is inherently better than another, but you may discover that some formats are more popular than others in your practice. For example, if you primarily treat patients who are new to TCM, the familiar format of tablets and capsules may be preferred. If your patients are already knowledgeable about TCM, they may appreciate the tradition and ritual of taking their herbs in granule form.
Forecast Your Inventory
A practice with too little inventory cannot meet its clients’ needs and risks driving them away. A practice that overstocks items wastes financial resources as well as storage space. Ideally, your practice should stock one month of inventory at most. This is achieved through accurately predicting demand. To project the future needs of your practice, consider factors such as historical sales figures, client demographics, trends in the TCM industry, lead time, seasonality, upcoming promotions and planned marketing efforts.
Store Your Herbs Appropriately
High-quality herbs must be stored properly to maintain their freshness and maximize their efficacy. Dry herbs should be kept in a room with a reasonably steady temperature year-round. Avoid storing them where they are exposed to direct sunlight or heat. A cool, dark room is ideal for most herbs. Some herbs, such as sticky formulas that contain red dates, require refrigeration to stay fresh. A KPC herbalist can help you identify the optimal storage method for your products.
Avoid Storing Formulas With Overlapping Functions
Do not keep herbs with overlapping functions in stock. This is inefficient and can lead to excess inventory that is difficult to use up. To reduce operating costs, use a formula as the base and add single herbs to create a customized remedy for your patients. For example, our Sheng Mai Yin formula contains three herbs: Ren Shen, Mai Men Dong and Wu Wei Zi. Instead of stocking these three herbs individually, a practitioner can choose to stock the Sheng Mai Yin formula and mix it with single herbs when personalized formulas are required.
Consider Drop Shipping
Drop shipping is a fulfillment method that reduces the need to keep herbs you rarely use in stock. In this scenario, you do not have to stock inventory or distribute the products yourself. Instead, a KPC distributor carries the inventory, compounds the formulas you request and ships them directly to your patients. By using this method, you can sell herbs without holding the inventory yourself, which helps your practice decrease risk while continuing to serve your clients. Drop shipping can also be an effective way to test a new product before investing in a large order.
Audit Your Inventory Regularly
Inventory counts should be performed on a regular basis to ensure accurate ordering and quality control. For TCM practitioners, we recommend auditing inventory at least once per quarter to make sure no herbs are expired or out of stock. Check the lot number and expiration dates on the labels of your products. To streamline this process, maintain an organized storage system and schedule your audits at regular intervals.
Make Adjustments Based on Experience
As you run your practice over time, you will become more and more accurate at predicting your inventory needs. Pay attention to any trends you notice. Do you consistently have the right products available when you need them? Have you lost business because certain herbs or formats were out of stock? Did you lose money due to excess inventory? Make intelligent adjustments to your inventory management strategy as your knowledge and experience grow.
KPC Herbs: Your Partners in Success
For five generations, KPC Herbs has provided TCM practitioners with high-quality, authentic Chinese herbs. By choosing KPC for your products, you have a partner dedicated to offering your practice the support, guidance and industry expertise it needs to succeed. Keeping your practice stocked with essential herbs can be simplified with the right strategies in place. If you have any questions about choosing the right formulas for your patients, proper herb storage or effective inventory management, don’t hesitate to contact KPC Herbs at 949-398-8158 today. We are here to help your practice thrive.