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7 Best Tips for Inventory Management To Avoid Losses

Tips for Inventory Management

7 Best Tips for Inventory Management To Avoid Losses | Image source: AR Racking

Inventory management is likely the most crucial success component if you sell products through an online store. Actually, it’s extremely easy to do that. Imagine launching a successful marketing campaign and seeing sales orders pour in, only to discover that the product is actually out of stock. As a result of only investing in an expensive marketing strategy, you immediately miss the point. The fact that customers have to wait longer than expected for a product that is not in stock will also make them dissatisfied.

In a nutshell, a situation to avoid. Your stock flows must be managed as effectively as possible. After that, you confirm that there is enough stock on hand. However, stock management offers much more than just the quantity of a certain commodity in stock. We’ll offer you some pointers for managing your stock in this article.

Read also: How to Manage a Warehouse: The 10-Step Guide to Logistics Management

What is Inventory Management?

Before we offer you any advice, let’s define stock management for ourselves. Controlling the movement of items within your business is inventory management. As a result, you maintain accurate records of the products that enter and exit your warehouse or storage facility. You should make every effort to keep storage expenses as low as possible because it costs money to store goods. How? For instance, by keeping the goods on hand for a brief length of time. Long-standing inventory in your warehouse does not make money!

However, you must keep adequate inventory on hand to meet demand. Finding a healthy balance is an art. Thankfully, it’s not a wet finger job, but with efficient inventory management, you can optimize the product flows coming in and going out. In the end, this will result in increased sales, happier consumers, and profit maximization. You also develop committed and repeat consumers in addition to satisfied ones! Seven suggestions that can improve your inventory management are provided below.

1. Track stock

Of course, the first thing to consider is whether or not the stock is being monitored. It is crucial that you map your stock and gather enough information. You may use the variety of valuable information in this data as a business owner. So, using this information as a basis, you can come to wise and informed conclusions. There are various methods for tracking inventory. We briefly mention them here.

  • Using a manual pen and paper
  • Using Excel or a similar software on a PC
  • With a WMS system that continuously monitors the stock

Your needs will determine which method you prefer. We generally recommend using a WMS system because it is precise and may generate numerous intriguing statistics on its own. A WMS system costs little money, but it can save a lot of time and cut down on errors to an absolute minimum.

2. Use one stock management system or WMS system

The first tip actually brings us seamlessly to the second tip. We absolutely recommend that you use a stock management system. Such a system will help you with stock management. You can control the flow of goods perfectly and have them move through the warehouse in a certain flow. Thanks to a WMS system, you can process orders more efficiently. For example, you can process orders in bulk while the system indicates the most logical picking route through the warehouse based on the created warehouse locations.

Yet too often we see entrepreneurs using multiple ways to manage stock. Collecting data from different sources is very time-consuming and increases the risk of errors. So you have to opt for one centralized system.

3. Create insight into the stock data

When an online store first opens, it frequently has a small selection of items, but that number quickly grows. It’s critical to properly organize data so that you can maintain an overview of the whole spectrum. If you don’t do this, there’s a good possibility that you’ll gradually lose the overview and end up choosing the wrong course of action.

You need to use items like Stock Keeping Units (SKU), stock costs, lot numbers, expiration dates, warehouse locations, supplier information, and courier information to acquire insight into the stock data.

We also remark that using a WMS system and maintaining a well-organized stock go hand in hand. You can process all of the stock information in a WMS system if you use one.

inventory management tips for companies

7 Best Tips for Inventory Management To Avoid Losses | Image source: Adobe Stock


4. Avoid stock loss

Many companies begin with the notion that a product they buy will actually be sold. You may frequently turn around from a long journey if you start with this idea. Inventory loss is inevitable. The trick is to keep stock losses to a minimum because they can drastically lower profitability.

Damage, theft, lost storage, expiration dates, and administrative mistakes are just a few of the many factors that can lead to inventory loss. Administrative mistakes account for 15% of stock losses, according to research. Some issues, like theft, are out of your hands entirely, but you do have complete control over management. A stock management system can help here as well! But another choice is to outsource the logistics. A fulfillment partner is highly skilled at controlling a huge inventory. A fulfillment partner can reduce inventory loss from damage, improper storage, theft (better security), and administrative mistakes to a level that you will never be able to reach.

Feel free to contact us to take care of your logistics!

5. The turnover rate

Selling items that are not in stock makes no sense logically. However, a lot of online retailers are able to run out of their best-selling items. This not only results in lost sales opportunities but may also discourage customers from visiting the store again. A situation  ought to be avoided at all costs! How do you stay out of this dilemma? by figuring out your products’ turnover rate. These calculations allow you to more accurately predict when you should place your order and how long it will be until the stock runs out. Always consider the supplier’s delivery schedule.

6. Get started with obsolete inventory

Of course, some things sell more slowly than others. These goods frequently find themselves in a neglected spot. Also avoid doing this, because it keeps you from buying new inventory and drives up warehouse costs, obsolete inventory can lower earnings. You may avoid these mistakes and eventually enhance profitability by effectively managing inventories. Additionally, as the market gets overrun with innovations, the value of outmoded inventories is falling.

The turnover rate is not the appropriate measure in this situation. Although sales are high, you can still have a poor turnover rate. Because, for instance, there is a lot of stock. We need to identify the inactive supply in this instance. A report with the idle stock is promptly displayed by an inventory management system. Once the inactive supply has been identified, it must be cut off. Conducting focused marketing initiatives will help you achieve this.

7. Map out all costs

Managing your inventory involves more than just keeping track of the goods you sell. You must budget all costs if you want to have a profitable internet store. So factor in expenses for things like storage (warehouse), shipment boxes, packing supplies, and mailing labels.

The profit margin can be calculated using these expenses. A crucial task that every entrepreneur should do!

4 Main Types of Transportation in Logistics

Types of transportation in logistics

Types of Transportation in Logistics | Image Source: Google Images

You will be able to plan long, medium, or short distance routes and the preparation of delivery routes by choosing the best possible combination of means of transport after studying the Transport and Logistics Training Cycle. You will also be able to carry out import and export operations of goods with the highest level of accuracy.

Additionally, it informs you of the logistical options the market provides in compliance with the laws now in effect as well as the goals set by the management of the organization within the parameters of quality, safety, and environmental respect.

Types of Transportation in Logistics:

1. Maritime transport

People or goods are moved from one geographic location to another by maritime transit. It is carried out at sea, i.e., aboard a boat, ship, etc.

People are now more frequently traveling by sea via short voyages or cruises as a result of the rise in commercial aviation. Large ships are mostly utilized to deliver products through international waterways in this respect.

For its dependability and adaptability, maritime transportation is unparalleled. In order to accomplish this, the industry has a vast number of ships with various features that are tailored to the requirements and the type of cargo being transported (oil tankers, bulk carriers, container ships, roll-on-off, etc.).

Main characteristics of maritime transport

  • Substantial storage capacity for bulk or container loads (a container ship can carry up to 165,000 deadweight tons)
  • The best method for transporting heavy material between two geographically remote locations is by sea.
  • Due to the improvements in highways, combining maritime travel with other forms of land transportation is very prevalent.
  • Since there are ships of all sizes that can accommodate various types of cargo, they represent a flexible and adaptable form of transportation.

2. Ground transportation

One of the most common methods for moving items in the logistics industry is via land transport. It is the most popular for short travels inside the same region or nation, yet it can also be utilized as a form of international transportation.

This method of transportation is made feasible by the enormous road network that has grown through time and allows commodities to quickly go to the opposite end of a country.

Main features

  • It is always done by road.
  • You can transport goods or people.
  • Promote door-to-door delivery service.
  • Allows the transport of patients in emergencies.
  • Allows you to transport dangerous materials or products
  • The costs are cheaper than air transport.

Furthermore, it enables you to deliver any kind of product because there are numerous ways to carry the goods. For instance, perishable items can be sent using vehicles that are designed to keep them fresh for a specific amount of time. However, compared to cheaper train transportation, this option may be more expensive.

3. Air transportation

As a result of the technological advancements made throughout the 20th century, it is the most recent kind of transportation. The fundamental distinction between this mode of transportation and others is the lack of physical impediments; all that is required for takeoff and landing are flat surfaces of land. The ability to move things quickly is its most crucial characteristic, and because of this ability to move things quickly, the usage of cargo planes for moving goods has grown in recent years.

Aeronautical technology is also making enormous progress in logistics-related tasks since it equips airplanes with engines that are more fuel-efficient.

Advantages of air freight transport

  • There are no physical obstructions, making it able to go uninterrupted.
  • It is the fastest form of transportation there is, which is crucial in terms of logistics.
  • Simple access: The many forms of air transportation may move cargo that other land- or sea-based transportation methods cannot.
  • Due to the speed of transportation, it is ideal for transporting expensive or perishable commodities over great distances.

4. Rail transport

The various rail modes are flourishing as a result of public concern over pollution and climate change. It is perhaps the least polluting medium overall from an ecological standpoint.

It is possible that the transportation is best planned in terms of the routes and set schedules. Compared to other forms of transportation, like ships or airplanes, for instance, its service is consistent and reliable.

Advantages of rail transport

  • Large volumes can be transported due to the size of the vehicles utilized to convey the goods.
  • In comparison to other modes, rail transportation is inexpensive.
  • Furthermore, we must take into account the fact that its high capacity enables the transport of huge volumes, thereby minimizing the number of trips.
  • Different types of items can be transported via rail freight. As a result, it is quite flexible.
  • Compared to other forms of transportation, it has a lower rate of accidents and pollutants.
  • Traffic and traffic congestion issues are avoided by using rail transportation.
Air cargo shipping ocean cross border logistics intermodal