How To Transform Your Stock Control Strategy To Improve Profitability
A Brief Introduction to Stock Control
Whilst some retailers sell large quantities of just a few products, others have a catalogue stretching to several thousand. There is no right number of SKUs to have, but when it comes to storage, stock control and reporting, there are solutions that will enable you find a balance no matter what products you sell. Unfortunately, sometimes businesses get it wrong and as a result waste time and money. The impact of this can be avoided with a different approach to your stock control and eCommerce retailers of all shapes and sizes can reap the benefits.
If you list more lines, you’ll need to keep more inventory, which equals more investment. The cost of storage can vary depending on space required, location and the number of SKUs you need to house. Many eCommerce retailers begin in their early days fulfilling from home or a small office unit, however you’ll need more space to grow your company, so warehousing is the better choice once order volumes increase. Sub urban locations are certainly cheaper than more localised, city warehouses, but for many retailers, outsourcing to a third party with access to greater infrastructure and more high-tech stock control processes is also an option.
Other costs include difficult to predict overheads. Managing your inventory levels, suppliers and producing orders, as well as time spent stock counting and locating items in storage all add up. The greater the number of lines a you have, the harder it will be to pick and pack orders accurately and on time without increasingly sophisticated software. If a large number of product lines are held it becomes critical that the right quantities are ordered in. This would prevent over or under stocking, which could result in money wasted or loss of sales. These additional costs can impact the value of your products and their margin, especially on slow moving lines which you may have to discount to shift. If one product sells half as often as another, the costs will quickly stack up and lose you money. If a retailer has 1000 SKUs with 500 single item orders per month then only 50% of the stock held is moving. Managing this is the key to your success.
If you would like to read more, please click here
← How to make your packaging more eco-friendly
- What is a SKU, why is it so important, and how many do you need? 55 views
- Why Facebook Marketplace just doesn’t work 27 views
- How many SKUs? Indicators for when you may have too many (or too few) 8 views
- 7 eCommerce Trends that are dominating 2017 7 views
- Managing your eCommerce Growth 5 views
- Logistics is the key to customer satisfaction 5 views