Inventory System: Buying Off-the-Shelf

In our last post Smart Shopper’s Guide in choosing an Inventory system, we provided you with some considerations you need to make in deciding for a system. If you needed someone to talk to just to verify your thoughts, feel free to contact us at and we can assist you in making a decision. This article will be focused on Off-the-Shelf applications you can choose from.

Recently, we’ve looked into an inventory system for a small business. The client’s business is an auto supply wholesaler looking for an inventory system in preparation for the next generation to take over (son). We first tried to assess the situation and gave a ballpark on how much our custom built system usually costs. As expected, the price is way too high and too large an investment for an operation that is considerably small. After the discussion, we’ve assessed that purchasing an off-the-shelf solution will be the best way to go for this family, and that they are free to choose which ones suits them best.

I wanted to guide you through the decision making process to help you determine if this is you. Also, I wanted to provide you guys with some possible Off-the-Shelf systems to choose from.

  1. Target System User: 2 Young and Tech Savvy users. Both the son and the brother of the owners are very tech savvy and have very forward looking plans for the system.
  2. Types of Business: Distributors. The business was importing wholesale and selling it to other retailers. But as a distributor, the company didn’t require any automated reporting with their suppliers or customers and most transactions are done by phone.
  3. Business Size: Small. The company have 7 office staff but has about 5 agents selling to retailers all across the country.
  4. Budget: PHP 30,000.00 all in. This should include installation cost, hardware, software, support etc. Since the purchase of the system has to go through the owners approval, the owners are not open to pay high amount for a trial application. They just wanted to be better organized, and wanted to entice the next generation to participate in the business.
  5. Timeline: None. The company doesn’t really mind whether or not they use a system. They are just entertaining the thought as it might bring the possible gain but they are not taking it as seriously or fully understand its value.

Upon investigation with the company, we also discovered that:

  • Warehouse – 3 primary warehouse location – all reachable within 10 minutes. However, warehouse were not properly organized and the stocks are scattered at different locations. The company haven’t even done a manual count of their inventory in years.
  • Record Keeping – The record keeping is done handwritten in long pad paper and had no summaries or reporting. It is typically ran by rough estimates.
  • “Departments” – There are no formal departments that exists, most of the operations are run by the owner. The rest of the staff’s work are to remember the warehouse sections they store the inventory in and data encoding such as for receipts and packing lists.
  • Commitment level – The owners know that their operation had slowed down through the years hoped that it will get back up on its feet. The owner is looking to retire but wanted the business to be continued by the next generation, so someone else has to learn it.
  • Infrastructure – The company have limited computers and internet and few actually knows how to use it. The owner is also not looking into doing some major investments and is concerned that internet access will cause distraction for its employees.

Verdict: After our review, it seemed like the company is better off with an off-the-shelf inventory system at this time. For me, the reasons are mostly because:

  • Educational investment – since the company’s inventory is poorly managed, it will benefit the company to learn how they can be organized and be encouraged to clean up the shop for the first time in years. The system will in a way teach the users the things they need to consider and to do it automatically for them. All they needed to do was analyze and determine a strategy they want to take.
  • Low investment cost – Off-the-Shelf application can be run with one time license and can be ran at a small scale first. If in case after trying they decided its not worth it to pursue their sunk cost is small. But in case they liked it, it should be at the right scale to support their operation for the mid term. If the business became bigger in the future, then the users will be more educated to identify bigger features they wanted and can communicate about them freely.

Note: In this situation a Software As A Service (SaaS) is also a viable option. Software As A Service applications are usually available for free trial in case the user wants to test first. Rates of Software as a Service options can be affordable too depending on the arrangement. Software as a service require purchase of the subscription but will then be accessible to multiple devices as opposed to off-the-shelf solutions which is installed per machine. But because this company was not fully committed to start the application, and they currently don’t have a reliable internet service nor have plans of fixing it, we recommended they go for an off-the-shelf solution.

There is a wide variety of Off-the-Shelf solution available on the internet for your reference. For any questions or concerns, feel free to email us at 🙂