Inventory Management Fundamentals
Inventory management is a precise balancing act which can mean the difference between profit or loss for your business in any given month. Poor inventory forecasting or even unanticipated changes in consumer trends can leave you with carrying costs that are sure to result in significant profit leakage.
At the other end of the market spectrum, a surge in demand can lead to “overselling” and your business finds itself in the position where it can’t supply the higher demand, missing an opportunity to optimize profits. Delays in fulfillment can have negative effects on your business reputation which can be difficult to overcome in today’s competitive marketplaces.
ABC Inventory Analysis
Prioritizing products with this simple but effective procedure is a basic inventory management tool to classify three categories of your inventory.
- A) Products of highest value with low sales frequency
- B) Moderate value products with moderate sales frequency
- C) Low-value products with a high frequency of sales
Using ABC analysis to categorize inventory helps you determine the optimal carrying cost. You can avoid incurred costs for category A by ordering more frequently as opposed to paying for storage while waiting for the occasional sale. If you’re using Warehouses Plus rental units you’ll have the month-to-month storage versatility to adjust capacity to meet demands for your B and C inventory categories.
Accurate inventory forecasting is based on the history of past demands. Tracking orders and peak business cycles to predict future inventory needs from multiple partners, consumers, and suppliers can be a daunting task using offline spreadsheets. Investing in inventory management software to access real-time data is the best way to ensure accurate inventory forecasting according to this article for E-commerce enterprises at business2community.com.
Inventory Solutions at Warehouses Plus
It’s easy to see how storage versatility can help you meet the demanding business challenges of inventory management. At Warehouses Plus our month-to-month rental units give you the inventory capacity you need without the hassles of signing leases and paying utility fees, so don’t hesitate to contact us.