{"id":7769,"date":"2019-02-14T22:14:46","date_gmt":"2019-02-14T22:14:46","guid":{"rendered":"https:\/\/michaeljbrumm.com\/dclcorp-phase2\/blog\/amazon-fulfillment\/save-time-money-inventory-management-tips\/"},"modified":"2021-06-27T11:19:08","modified_gmt":"2021-06-27T18:19:08","slug":"save-time-money-inventory-management-tips","status":"publish","type":"post","link":"https:\/\/michaeljbrumm.com\/dclcorp-phase2\/blog\/inventory\/save-time-money-inventory-management-tips\/","title":{"rendered":"What is Inventory Management? Techniques, Tips and More"},"content":{"rendered":"

At its base level, inventory management refers to tracking the goods a company has in stock. It includes such activities as ordering, restocking, storing and inventory forecasting.
\nStrategically managing inventory gets more challenging in accordance with growth of units sold. Inventory can also grow if new and more types of products are introduced and sold. The right inventory system can help manage inventory, and is a crucial part of supply chain\u00a0management.<\/span><\/a><\/p>\n

Many small businesses think that outsourcing <\/span>order fulfillment<\/span><\/a><\/span> and product storage to a <\/span>third-party logistics<\/span><\/a><\/span> (3PL) provider means completely turning over the inventory management process to them. The truth is a 3PL can provide valuable tools and data that will allow a seller to successfully manage their inventory in the most efficient as well as cost effective manner possible.<\/span><\/p>\n

The Importance of Inventory Management<\/h2>\n

In today\u2019s hyper-competitive ecommerce marketplace, good inventory management is an often overlooked but critical aspect for any seller. It is vital that the inventory management process is efficient, cost effective, and accurate. If you do not have all of those components in place you may run considerable risk of failing to meet customer demand and losing money.<\/p>\n

There are many benefits for a seller to establish proper inventory management.<\/p>\n

1.<\/strong>\u00a0\u00a0SAVE MONEY ON STORAGE FEES<\/strong><\/h3>\n

If you have too much inventory on hand it will likely cost a lot in storage fees. \u00a0And that\u2019s money that could be spent on branded shipping materials, or absorbing expedited shipping fees. Storing goods is most often based on how much physical space your products take up. Fees vary depending on how many units you need to keep in stock.By keeping your inventory at the right amount based on your customer demands \u00a0you will save money on storage fees, and put it toward aspects of your business.<\/p>\n

2.<\/strong>\u00a0\u00a0ENSURE YOU NEVER RUN OUT OF PRODUCT<\/strong><\/h3>\n

One of the most critical parts of inventory management is calculating the right amount of product units (SKUs) needed in stock at any given time. If your stock level dips too low, you run the risk of running out of products which can lead to missed sales, backordering, and customer service issues. On the flip side if you have too much inventory, it can result in having products that can no longer be sold due to decreased demand or being outdated. This is also known as \u201cdead stock\u201d. Proper order management<\/a>, combined with analytics can also help with your warehouse management operations.<\/p>\n

3. \u00a0PROVIDE INSIGHTS INTO CUSTOMER BEHAVIOR<\/strong><\/h3>\n

By monitoring the amount of product inventory that gets shipped \u00a0(as opposed to that which is unsold, in storage, or stuck in any part of the supply chain) you will gain valuable insights into what customer\u2019s preferences. Is there a peak month of purchase? Perhaps a specific location that buys your product most frequently. Additionally any spikes or dips in inventory after a product launch will help lend necessary feedback on your promotional efforts and product likeability. This can cut down on the lead time as purchase orders come in as well as streamline operations at your point of sale. This can help with both inventory tracking and inventory control, and is crucial for a small business.<\/p>\n

4. \u00a0FORECAST FOR THE FUTURE<\/strong><\/h3>\n

Proper inventory management can help with inventory forecasting<\/span><\/a>. By tracking and managing your inventory storage levels and output flow, you will be better able to plan for demand. If you monitor your inventory trends on a monthly, quarterly, or unit-to-unit basis you will likely be more able to keep up with sales.<\/p>\n

5. \u00a0PLAN FOR THE UNEXPECTED<\/strong><\/h3>\n

No one can predict the future, but by managing your inventory can help you prepare for unexpected supply chain issues or deficits, such as:<\/p>\n