As per an article by TCS on SKU Rationalization, facts confirm that up to 35-40% of the total inventory is stuck in the non-performing, slow moving SKUs, whose cumulative contribution to sales is less than 5%.
With the above information, you can realize how your inventory management directly impacts the bottom line results. And, when speaking about managing inventory, SKU(Stock Keeping Unit) is considered to be the key for maintaining an effective inventory management cycle for your business.
So does your inventory management practice involve SKUs? If not, let me throw some light on its results that you may not be aware of.
1. Stock transparency
Your business will deal with stock ins-and-outs on a daily basis, hence having a system to track them becomes very important to maintain correct stock levels(no more, no less). Allocating SKUs for your inventory will make it easy to determine the actual counts and help you always perform an effective inventory management practice for your business.
2. Easy stock identification
When dealing with few products, it’s possible to identify those slow moving products, damaged products, missing products or even thefts. However, when your business grows, you will have to deal with more products in order to grab every opportunities that come one’s way. This is where SKU makes it easy and quick to track stock and keep levels maintained, which automatically eliminates the risk of unforeseen events.
3. Stock replenishment
You need to ensure products are procured and available to customers all time, in order to keep the business going on. But what about those cases when your product shows as stock available, but after the customer places the order, you realize that particular inventory is not available in the warehouse. Such situations directly hampers bottom line results, and I’m sure you won’t like that to happen. Therefore, automating your inventory management processes and adding SKU to each product variations will eliminate such ugly and costly situations. Also, automation will allow you add threshold limit for every product and ensure the levels of inventory will never get out of hand.
4. Safety lock
Tracking inventory on daily basis is important for practicing an effective inventory management flow. This is done to ensure stock levels of the warehouse are in-sync to stock levels of the inventory management system. And, by adopting SKU management will help you allocate unique identifications for each product variations(size, color, etc.) making it easy to reconcile stock levels for your business.
5. Smarter stock investments
Lastly, an effective inventory management practice in place can help you save hundreds of dollars. Adopting SKU management you don’t need to worry about dead stocks scenarios, as you’ll get a clear picture of your good and bad ones. This way you can take instant inventory decisions and use your capital sensibly.
Source link: http://www.tcs.com/
Christmas season is around the corner and is considered to be a good time for both, consumers and sellers.
A report from Statista shows how “Christmas Holiday Retail Sales” in the United States is growing steadily. In 2014, the “Christmas Retail Sales” grew to about 620 billion U.S. dollars; a 4.1 percent rise from the previous years.
Also, the 2013 survey revealed that the U.S. online shoppers are expected to spend about 830 US dollars on average on Christmas gifts in this year, 2015. The contributions of millennials are approaching holiday season more vigorously than the old shoppers.
This is great news for sellers to increase sales, but, many are still complaining about not being able to fulfill customer’s orders, due no stock in hand.
Therefore, this article is specially designed to offer insights on last-minute inventory techniques and help small sellers grab every opportunity that come their way.
Smart inventory management to cope up with Christmas rush
Another report by Statista stated that holiday season accounts for around 20% of industry’s annual retail sales.
And, to make the best from the most profitable time of the year (Christmas season 2015), sellers cannot afford to wrong with the inventory.
Winning inventory tips and tricks that you can consider:
1. Do some quick inventory research
Offering customers with products that they would like is first thing to keep in mind in your holiday season strategy. However, stocking products blindly will mess up your inventory management flow.
Gathering past information will allow you to smartly stock and offer customers products that they would want. This way you can make the best optimization out of your inventory as and when you grow.
This data should include your customer’s past holiday products liking, and what promos made them take action. Tracking such data will streamline your product stocking process, ensuring that you have purchased and stocked only those products that are sure to be sold.
Multi-channel inventory and order management system is helping sellers to have a single access of their entire customer’s data in real-time.
Next, you would like to know how frequently products are being purchased. This is done, to ensure your inventory gets out of the shelves, before they get outdated. This becomes important for any sellers, especially, the ones dealing with food and other products that have expiration.
“Google Analytics” can be an ideal option to track website usage and understanding customer’s browsing pattern for your products.
Lastly, to understand your existing/loyal customers demand is more important, as online shoppers prefer to shop from brands they are comfortable with.
Email, website, phone calls, social media can be cost-effective source to run feedback campaigns.
A customer feedback software solution can be an alternate option, for ensuring increased participation. Such tools offer sellers ready-made feedback survey forms, as well as, they can customize content to encourage more participation.
2. Create sections for your product assortments
With the above, you can forecast your holiday product requirements. Next, you need to make sure products are easily accessible for fulfilment.
Therefore, organizing shelves and stocking products systematically is another factor important for a successful inventory management.
Stocking products in groups as per their demand will ensure quick fulfilment. It is suggested to create three groups, marked as, “Group 1,” “Group 2,” and “Group 3.”
Group 1 can contain most-demanded products, Group 2 can contain average moving products, Group 3 can contain slow moving- products.
This way you can fairly, put your hand off Group 3, allowing you to focus more in tracking stock requirement for Group 1 and 2.
3. Decide a minimum and maximum alert for your stocked products
Stocking products without keeping a tap on the count is a bad inventory management practice.
An ability to know the quantity of your stock in hand will ensure products are purchased in time to avoid delay in fulfilment, especially during Christmas season.
Allocate an alert notification for your product categories, which can include a minimum and maximum limit for each category. This will make it easy to track demand for each of your product well-in advance, and avoid stock outs.
Automating your inventory management process- you will have an ability to set a minimum and maximum stock limit, ensuring you never miss out on any sales opportunity during the Christmas season.
4. Place purchase order only when needed
Sellers quite often complain that they end up stocking more during the holiday season, despite of performing the best inventory management practices.
Adapting “Just-In-Time” inventory management method is surely helping many sellers to save inventory space and costs. As the name suggests, it involves ordering of products only when a customer places an order.
This technique may sound risky; however, having a good relationship with suppliers can help you win this game.
A “customer management system” is helping sellers to add and store supplier’s information and details at one place. This makes it easy to track performance and take measures to enhance relationship.
With the above, you plan and perform an excellent inventory management for your online store during this Christmas season, 2015.
But, that’s not all!!
Another factor to decide a successful flow of inventory, is, at what price have you listed your products?
Running a pricing strategy is important to stay competitive during the Christmas season. However, dealing with many products can make it difficult to update prices in time.
How can you adopt a good re-pricing strategy for your products?
Automating product re-pricing is smart solution to withstand competition and ensure your products are always offered at a price that your customers would actually like to spend for.
Such tools also allow sellers to keep a minimum-and-maximum price limit, ensuring they can make more profits from every product that is sold.
For Amazon sellers
Selling on Amazon- where pricing is updated throughout day, sellers need to realize the importance of automating product reprising, especially when dealing with multiple products.
RepricerExpress, Appeagle are leading repricing tools that are helping small Amazon sellers attract more sales opportunities and stay competitive, always!
For eBay sellers
Similar to Amazon, eBay marketplace allow sellers to update their pricing throughout the day.
This way, automating your product re-repricing when selling on eBay will keep you products listed at a good price, always.
Wiser, is seen to be helping many eBay sellers cope up with this the re-pricing updates when selling on the giant platform.
For sellers selling on their own stores
Depending on the amount of products you deal with, you can either perform:
Considering these last-minute inventory insights for this Christmas season, your small and medium size business will attract sales, enhance delivery, and offer excellent customer service, allowing you to happily eat, drink, and party.
Simple, yet powerful