Inventory management solutions delivering real-time visibility
There are three different types of inventory retailers generally deal with: Fast-moving, slow-moving and non-moving inventory. As the names would suggest, this covers everything from items that merchants struggle to keep on shelves to units that don’t sell in more than a year. A retailer’s goal is to maximize the number of fast-moving items in stock while minimizing the purchase of slow-moving or non-moving SKUs.
One report from SCORE suggests inventory accounts for between 45 and 90 percent of total business expenses, so it is imperative that retailers identify which items are hot and which are not. Slow-moving products end up as frozen capital that lose value over time – if retailers can not sell certain products, they struggle to earn their capital back, which in turn leads to small profit margins and lost sales.
Not only is excess inventory essentially frozen capital, it also takes up expensive real-estate at the warehouse. If merchants are stocking hundreds of unsold goods, they will not have the space to store fast-moving items that are bringing in more revenue. This leads to some obvious problems, most notably running out-of-stock of fast-moving goods because they simply don’t have the capacity to meet consumer demands with the limited space available to them.
The Power of Inventory Management Solutions
Unfortunately, managing inventory is more difficult than it may sound. If it were easy, merchants would never be forced to have liquidation sales and they would never run out of stock.
Inventory management solutions can help retailers deal with these stock issues. The right inventory management solutions will provide merchants greater real-time visibility over their stock levels, allowing them to quickly identify which items are selling fast and which are languishing in the warehouse.
If retailers operate across many sales channels, including eCommerce webstores, brick-and-mortar stores and online marketplaces such as Amazon and eBay, inventory management solutions will play an even bigger role. The right systems will be able to centralize inventory management, giving merchants a single view of inventory allocated to each sales channel. They will be able to quickly see where inventory is low, which items are selling on what platforms and make the right decisions about allocating inventory to the top-selling channels as a result.
Better inventory management solutions also help merchants automate many stock-related tasks. For example, when a certain inventory level threshold is reached, an inventory management system may alert the retailer and even generate an automated purchase order to ensure stock is replenished before there are out-of-stocks.
Inventory management solutions can also help with forecasting efforts, enabling retailers to see which items are selling during specific time frames. This will be particularly important during seasonal periods, such as end of the year holidays, and enable retailers to meet demand on the hottest items.
Avoid inefficiency with an inventory management system
Customers who can not find an item will not wait for a retailer to restock, they’ll simply buy from a competitor instead. This is why merchants must use inventory management solutions to manage their inventory – it allows them to capitalize on these opportunities while also streamlining operations.
“Efficient or inefficient management of merchandise by a firm is a major factor between healthy profits and operating at a loss,” the SCORE report added. If merchants want to retain their place at the top, they’ll need a solution that can consolidate inventory data from multiple channels and provide them with real-time visibility.