Inventory Management Best Practices Strategies You Need
E-Commerce storeowners often want inventory management best practices to help them in their businesses.
If you do not have the inventory management best practices for your store, you might get stuck in the middle.
When this happens, you will lose revenue and even lose some of your loyal customers. How do you get inventory management practices?
Inventory Management Best Practices
Here are some of the tips you need to achieve the inventory management best practices:
Do you know about the ABC analysis? This analysis helps determine the products that should be classified as the most and least valuable.
This practice helps you decide the products that need attention and time based on the Pareto Principle
The principle proved that only 20 percent of products drive 80 percent of your e-Commerce business.
Guide to the ABC Analysis:
- You have to collect information about your product’s stock and prices.
- You have to discover the potential revenue for each product. You get this when you multiply the individual item’s price with the number of items.
- Arrange your business products in descending order of potential revenue.
- Calculate all individual product revenue figures to compute the total potential revenue.
- For every product, you have to calculate the revenue each product brings in, as a factor of the total potential revenue.
To achieve the inventory management best practices, you have to divide all your products into three stages; A, B, and C.
These stages or groups help you concentrate on your most valuable products. 20% of the products driving your sales should be paid more attention to.
Keep Track of the Inventory
Inventory management best practices include monitoring your inventory. You should plan your inventory.
If you have no track of your inventory, you might end up selling a product that is not available in your stock.
E-commerce businesses that have in-depth visibility into their inventory tend to plan and handle their shipping well.
Stock Information Consistency
You have to make sure that your stock information is consistent across several channels. If you do this, you are carrying one of the inventory management best practices.
For you to gain more from your inventory management, you should ensure that your inventory data is consistent in every one of your sales and location platforms.
How do you achieve these inventory management best practices? We have listed the ways you need to achieve a cross-platform consistency.
Here are what to do:
a) Consistency Across Your Physical Locations
Inventory management best practices demand that you maintain consistency in your physical locations.
You have to have precise inventory data that is made available in your different warehouses. You can achieve the accuracy of your stock data when you item-level tag your products.
b) Consistency Across Your Sales Platforms
If you operate many sales platforms, you should ensure that there is consistency in their data. You should link your sales channels to avoid mistakes.
This is how you can maintain inventory management best practices in your business.
What you should know about Inventory Management Best Practices
Setting Par Levels
The inventory management best practices must be smoothened when you assign minimum stock levels for some of your vital products in the system.
How do you achieve this? You have to set the levels to help your managers prioritize what to restock and maintain your business.
The par level should be analyzed to help you get your restocking better.
Remove Dead Stock and Wasted Inventory
Taking out the wasted inventory and dead stock is one of the inventory management best practices.
You can lose revenue because of overstocked products. You should not have too much inventory if you want to maintain a great shop.
To determine how much you have to produce or purchase, you should check your reporting tools to avoid wasted inventory or dead stock.
Review your Inventory Carrying Costs
You have to review your costs regularly if you want to maintain inventory management best practices.
You have to know what is selling or not. Cut down on products that are not bringing in money and concentrate more on those that are profitable.
Inventory management techniques like back-ordering, dropshipping, bulk shipping, cross-docking, back ordering, and others can help you.