Make ‘Out of Stock’ a Thing of the Past for Your Business

By James Mellor posted 08-22-2019 21:17


Whether you own a small business or you operate a large corporation, having the right amount of stock is crucial to your overall success. But trying to determine how much stock you need is a difficult task. You need to make sure that you have the products available that your customers need, when they need them. If you’re out of stock, you run the risk of losing customers to your competition and your reputation will take a big hit. Holding excess inventory can help you avoid running out of stock; but, it isn’t necessarily the best solution. There certain disadvantages of carrying too much stock. It reduces available cash flow, as your money is tied up in products that may not sell and increases the risk that the products you have on-hand will expire (perishables) or become obsolete; plus, excess stock requires more storage space. 

So, how do you reduce the risk of running out of stock without ordering too much? Below, we’ll share some effective tips that will help you strike the right balance in your inventory. 

Implement Effective Inventory Management

Inventory management is vital to your success. It allows you to keep tabs on inventory so you know what you have and when you’re running low. It lets you know where your products are located, which improves order fulfillment. It lets you keep track of what’s selling and what isn’t. It can also help to prevent theft and significantly reduce costs. For all of these reasons, it’s essential that you are implementing an effective inventory management strategy. 

If you’re using the old paper and pencil approach or spreadsheets to keep track of your stock, it’s time to move into the 21st century and start using Inventory management software. This software offers applications that keep track of, manage, and even handle the ordering of products when they’re running low. It improves efficiency, reduces costs, speeds up order fulfillment, and helps you avoid running out of stock. Ultimately inventory management software can improve customer satisfaction and dramatically improve the success of your business. There are several types of inventory management software options available. Make sure that you choose one that offers the right features for your business. 

Assess Sales Data

Historical sales data can help you avoid running out of stock. It lets you see the history of your sales, including what products have moved and when in previous years. This information can be used to set accurate projections so that you can determine how much inventory you’ll need and when you’ll need it. For example, if you sell seasonal products, assessing your sales data will let you know when it’s time to kick up inventory so it’s available when sales pick up and when you can reduce your stock so you aren’t spending money and taking up valuable space on products that aren’t going to sell for a while. 

Switch to Dropshipping

Switching to dropshipping is another highly effective way to reduce the risk of running out of stock. With dropshipping, you don’t hold your inventory, but rather, a third-party wholesaler holds it. With this order fulfillment strategy, when a customer orders a product, you purchase it from the wholesaler and they ship it directly to the customer. Dropshipping completely eliminates the need to implement inventory management and significantly reduces the risk of running out of stock. It frees up your time so you can focus on other aspects of your business and cuts costs, too!

Summing It Up

Running out of stock can have a major impact on your overall success. By implementing these strategies, you can reduce the risk of running out of stock, improve customer satisfaction, and boost your success.  

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