Managing inventory is important to every online retailer, no matter the size of your company. Failing to control inventory correctly leads to a lot of expensive problems – like having too many of items you cannot sell or not having enough of the products your customers want.
The following methods can help forecast and track your inventory, helping avoid many of the challenges that come with optimizing on-hand inventory.
- Keep Your Inventory Organized
Inventory management is more than just knowing how many of a certain item you have in stock. Having a structured process for classifying the products you sell is important too. When inventory is broken down and coded in other meaningful ways (such as “safety”, “replenishment”, or “obsolete”) – better decisions can be made regarding the appropriate levels for each.
- Maintain Inventory Levels
Obviously, the most popular-selling items should always be in stock. Lower-producing products should have little or no inventory, and should be checked regularly to make sure they do not need to be categorized as obsolete. Obsolete inventory should be sold if possible, or written off after a certain amount of time as carrying unusable inventory impacts the bottom line.
Forecasting also plays an integral role in inventory management. Inventory levels should be forecast based on sales history, as well as any seasonal/holiday changes. When in the planning process, consider not just the finished goods sitting in the warehouse, but also raw materials, work in progress, and spare parts as part of inventory.
- Monitor your Safety Stock Quantities
It is important to set realistic safety stock limits for your most popular SKU’s. Not doing so might mean you are not able to fill orders for your most important customers. Depending on the levels you have in place and rate of sales, stock should be monitored daily or several times a week. Your warehouse can easily create reports to assist in the tracking of safety stock. Safety stock levels should be re-evaluated every 3-6 months to make sure that business decisions are being made on accurate information.
- Use the Proper Tracking and Analysis Tools
An online retailer should invest in the proper database and software tools to track and analyze inventory levels – or find a partner who can offer this technology. The software and reporting systems should be easy to understand and use, as this is one of the most important ways a company can monitor inventory.
If you choose to design your own inventory reports, everyone involved in inventory decisions should have access as well to make sure everyone is working off of the same data. It’s also important that inventory data be updated at the same time daily.
Efficient inventory management is a requirement for any online retailer to operate at their best. Kable Fulfillment customers benefit from optimized inventory thanks to real time access to orders information, inventory, and shipment data. Contact us today at www.kablefulfillment.com to see how we can help.