An inventory system that’s consistently well-managed sets successful businesses apart from competitors. There’s no such thing as a perfect inventory system from the start. You always have to add a few tweaks to make the system better than the last. However, these little changes always compound to take your process and profits to a higher level. Every business encounters issues. And while it’s true that managing your inventory well alone won’t ensure your success, the process does indeed go a long way to help you when experiencing some issues.
What is inventory management?
What is inventory optimization? This is a question many ecommerce owners might have, especially when starting. Managing your inventory refers to managing all processes that affect it. Some of these include receiving inventory, storage, delivery, and restocking. It would be best to have a lot of information to keep your inventory well managed, such as your current stock levels and your daily sales volume. This information is critical because it helps you make sales predictions and forecast how your products will move. The more efficient your inventory optimization, the more accurate the information you receive.
Learn to improve your inventory management.
If you’re looking to improve your business’s supply chain via your inventory management system, the below tips will help.
Understand the supply and sales cycle.
A thorough understanding of your supply chain is a must for top-notch inventory management. One way to understand your customers’ supply chain is by making use of real-time data and past inventory data. Knowing past patterns allows you to draw up a suitable plan for stocking up on certain products and recording products that might be in high demand. For better inventory management, learn and understand all the steps taken before a product touches your shelves.
Set low stock levels.
Keeping stock of products can be tricky. You might end up keeping excess stock of a particular product resulting in your money and warehouse space all tied up. On the other hand, you could keep too little of a particular product and end up losing customers when you run out of stock. One way or the other, you need to find a balance between having just enough product in stock but not too much that you run at a loss.
One way to attain balance is by keeping minimum stock levels of all products. Set a fixed minimum stock level for all your products and create a system that allows you to order a new set right before your current stash runs out. The best way to set your minimum stock level is by using your consignment inventory data and sales data. Compare this data to the amount of time required to receive a new order of the items. Ensure that you always have items in stock.
Let go of some stock.
The major cause of money loss in ecommerce is having money tied up in products that aren’t being sold. Imagine having more than half of your money just sitting on the shelf, tied up in products that refuse to sell. While your records will show a lot of monetary resources in inventory, most of that money is stuck and can’t be recuperated. Since these products are more likely to lose value than gain, it’s better to put them on sale to help clear all your shelves for other products.
It’s very easy to forget about your inventory when you’re not in the warehouse all the time, which is why warehouse management is a great way to keep tabs on all your stacked items. With proper management, you can identify the items that move fast, those that take some time, and those that have been stuck on the shelves for a long time. The earlier you clear the dead stock, the faster you can bring in new inventory to recoup your losses and pick up again.