Running your own small business means wearing a variety of hats and completing all sorts of tasks to ensure that things run smoothly. One of the more menial tasks can be ordering and receiving supply shipments.
With any type of handmade business, you will inevitably need to purchase materials and supplies in order to make your products. While you may purchase some of these supplies in store, many will likely be bought online. Ordering online opens you up to a wider selection of suppliers and allows you to order frequently and in bulk without constantly making trips to the store.
One of the main disadvantages with ordering online is that you didn’t see the products in person before buying them. That means you should take a bit more time to check over the shipment to ensure you are satisfied with everything.
I have a system in place for receiving supply shipments. It helps me work more efficiently and in a more organized fashion. Here are 5 great steps to receiving supply shipments.
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1. Check that you Received all Supplies
The first thing I do when receiving supply shipments is to check that everything I ordered is there. I find that the easiest way to do this is to take a physical print out of my receipt or invoice and check items off as I unpack them. Some shipments may include a packing slip in the box – that works great. If not, I will just print off the receipt, order confirmation email, etc. that I received when I placed the order.
2. Inspect Supplies for Damages
After verifying that I’ve received all of the items, I next inspect them to check for damages.
If you have missing or damaged products, it is always best to know as soon as possible. You will want to contact your supplier to let them know about the missing/damaged products. Call or send them an email clearly specifying the affected items and quantities.
Your supplier should have a clear policy in place for handling these types of situations. This will specify whether they will send you a replacement, offer a refund or store credit, or in some cases, do nothing. If the supplier won’t offer any compensation for missing or damaged products and it’s a frequent occurrence, it may be time to find another supplier.
Why should you inspect supply shipments immediately?
Your supplier may have a set time frame for making claims for missing or damaged items. (For example, within 48 hours after delivery.) If the products were damaged in transit, your supplier may need to file their own claim against the delivery service for the damages and the delivery service will have their own time constraints as well. For these reasons, reporting any shipment issues promptly is very important.
For claims of damaged products, it is always a good idea to take photos of the affected products and the packaging (if it appears damaged as well). Your supplier may require this for proof before offering you a refund
When is it worth inspecting your supplies?
It is not always worth my time to inspect every item for damages, so I don’t bother to do this for every supply. However, I know that for those items which skip inspection, I am taking responsibility for any losses due to damaged materials discovered later.
Here are a few questions that help me decide whether to inspect individual items when receiving supply shipments. If the answer to one or more of these questions is yes, I will likely inspect each item – at least to some degree. But if the answers are no, it is typically not worth my time to check them over too closely.
Are the items fragile?
Fragile items are obviously more likely to arrive broken, so inspecting them can be a good idea.
Are the items fairly expensive?
If so, damaged items could be costly and you’ll want to get a replacements or refund.
Has this item previously arrived damaged?
This tells you that the item is either fragile, poorly packaged, or mishandled and is likely to get damaged again.
Have I received damaged items from this supplier before?
Maybe it’s not the product itself that has a tendency to break in transit, but a supplier who doesn’t pack their boxes well. Patterns of damages means it’s likely to occur again.
Does the packaging appear dented, torn, or otherwise damaged?
It’s possible the products inside could have been damaged as well, so it’s a good idea to take a closer look.
Is this an item which requires accurate inventory counts?
Finding damaged materials later on could mess up your inventory. For some items, this isn’t a big deal but for others, it can ruin an order. For example, let’s say that you sell a rainbow assortment of tumblers and a customer orders the last blue one. You go to grab the tumbler to fulfill the order and discover that it’s dented. You don’t have any other blue tumblers so you’re unable to fulfill this order. If you had found the damages when you received the tumbler, you wouldn’t have added it into your inventory and ended up in this scenario.
For items which you carry many of and have fewer variations, finding damaged products is less likely to affect a customer’s order. For example, I carry a large stock of white sublimation mugs. I reorder these well before I’m down to my last one. If I find one is damaged, I can just grab another mug to complete the order.
3. Put the Supplies Away (Properly)
To keep your business running smoothly, you want to take the time to put these supplies away now. Leaving the boxes unpacked on your floor or desk will create clutter that you must then work around. It also increases stress as it adds to your seemingly endless to-do list.
How you organize and store your supplies is completely up to you and there’s no “right” answer. It depends on the items themselves, your storage space, and your organizational style.
My one piece of advice is this. Take the time now to store the items in a way that makes using them the easiest. Not what is easiest to do now. That may mean moving other products out of the way or unpacking individual items so they can be grabbed more quickly.
You will only be putting these items away very infrequently, but you will be using them on a daily or regular basis. So it makes sense to save a bit of time and effort for yourself every day.
Following FIFO
It is always the best business practice to follow FIFO: First In, First Out. This means that you should use the oldest supplies first, before using the ones you just received. This keeps materials fresh.
This is especially important if your supplies have expiry or best before dates. You want to always use the oldest ones so you don’t let them get too old.
Make sure to put this new shipment of supplies at the back/underneath any supplies you already have. You will naturally grab the ones at the front/on top when using these items. Set yourself up now to have the oldest supplies the most accessible.
Here’s an Example from my own Office
I have large shelving in my office closet where I store most of my tumblers. The tumblers come wrapped individually in bubble wrap and packed 4 to a box. The easiest way to put these away would be to just stack all of the boxes on the shelves. However, every time I need a tumbler for an order, I would have to find the box, open it, pull out the tumbler, remove the bubble wrap, and put the box back on the shelf.
When I am grabbing tumblers to fulfill orders, they would ideally be on the shelf individually, out of their boxes and bubble wrap pouches. That way I could easily see the colours, grab the ones I need, and they’re ready for personalizing. However, the tumblers don’t stack very well when they’re loose and I have limited shelf space so I need to maximize the amount of tumblers I can store on the shelf. So storing them all individually isn’t great either.
I compromise between the two so that I can efficiently store the tumblers and grab them more easily.
My Solution
I inspect each tumbler when I receive them. To do this, I have to remove the bubble pouch. Rather than put the tumbler back into the pouch and then have to remove it again to personalize the tumblers, I put all of the bubble pouches into a fabric bin and slip the tumblers back into the box. I reuse the pouches for shipping, so when I go to pack up an order, I just grab a pouch from the bin and pack the tumbler inside.
I store the tumblers in their full boxes on the shelf. The boxes are labelled with the colour on top. This isn’t visible on the shelf, so I write the colour on the ends.
I stack boxes of the same colour on top of each other with the oldest on top. I also stack the colours in alphabetical order from left to right. So when I’m looking for “white” I know it’s on the right side of my shelf; “black” is on the left, etc.
Once a box is no longer full, I discard the box and put the loose tumblers on top of that colour’s remaining boxes. The loose tumblers are much quicker for me to grab. Because the rest of the tumblers are in boxes, I can still stack the tumblers for more storage, while easily accessing the ones I need.
Each tumbler also comes with a straw. I keep the straws in the full boxes with their tumblers. For the loose tumblers on the shelves, I put all of their straws in a plastic bin on that same shelf. When grabbing a loose tumbler, I can easily grab the matching straw from the bin without having to open up more boxes, etc.
4. Receive the Supplies into Inventory
If you use an inventory tracking program or input quantities on your product listings in your shop, you will now want to update those inventories to include the new supplies you received.
I simply use the printed copy of the packing slip, receipt, or invoice as a guide to update my quantities, checking the items off as I add them in.
For some supplies, I skip this step as I don’t keep an ongoing inventory count. Some examples would be packing materials like tape or vinyl rolls & sheets. Instead, when I go to use these items and notice they are getting low, I make a note of the item on my “Order” list. This list hangs on a clipboard in my office and is organized by my suppliers. I keep a running list of items I need to order soon and then when I am ready to place an order with that supplier, I make sure to add everything on my Order list as well. I then cross those items off the list.
5. File the Receipt
Now that everything has been properly received and accounted for, you may think that this process if finished. However, don’t forget the important last step in receiving supply shipments – filing the receipt.
In order to claim these supplies as business expenses on your income tax return, you will need an itemized receipt for proof of purchase. You will also need to record these purchases so you can account for them on your tax return.
We’ll discuss expense tracking more thoroughly in another post. The general idea is that you should set up some type of system for saving and recording these receipts. If you keep paper copies, designate a folder, box, or drawer for your receipts. Keeping digital copies can be great idea as you need to keep the receipts for many years (in case you are audited) and paper receipts can fade over time. For digital receipts, set up a folder on your computer or a cloud storage system (like Google Drive) and add all of your receipts there. If you didn’t receive a digital receipt, just scan in the paper copy now.
As for reporting the purchase, you will likely be using either a spreadsheet, a program like Quickbooks or Wave, or a bookkeeper/accountant. Whichever is the case, set aside a time every day, week, or month (whichever works best for you) to record that period’s receipts.
That’s a Wrap!
Once you have reported and safely filed the receipt, you have completely finished with receiving this shipment of supplies. It can feel like a lot of work. But if you set up a process for yourself, it’s a lot easier to get things done properly right away instead of letting them build up to an overwhelming state. Plus, it can be a nice break to work on mindless tasks like putting away inventory. Put on some music and get up off your chair for a few minutes.
I hope this helps you feel more organized with receiving your supply shipments.
Looking for ways to save on shipping out your products? Find out how in this post.
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