The first thing comes in mind ‘What is an Inventory and Inventory Cost’ if you're running an offline or online store. So, Inventory is a complete list of products available in stock for sale. Hence, Inventory Cost is the cost of holding goods in your stock. Inversely, the inventory costs are a major expense for many businesses. As a result, the operational costs of the businesses are up going. To maintain an inventory and pay for the inventory cost are always a big headache for most of the sellers and suppliers. You as a seller or supplier may be thinking about Inventory Reduction Strategies. Therefore, I’ve compiled some best Strategies for Reducing Inventory Costs.
1. Keep as little inventory as possible:
You’re a big seller or small seller doesn’t matter. Thing is that how big is your inventory and why? You think that if you have a large inventory, bulk goods in your stock then you can make more sale. Am I right? Then you are wrong!
Here is the fact. More sales don’t depend on your big inventory. It will only increase your operational costs and maintenance of such huge goods.
So, the best part is to minimize your inventory as possible as you can.
2. Elimination of obsolete stock:
Tell me one thing. Assume this is a summer season and your inventory is full of the goods of winter time, then what will happen? Means you are misleading from your business.
I want to say clearly that you must be known what and when you are selling. Throw out outdated products from your inventory. These outdated products are occupying your inventory, generating zero revenue and increasing your stress. So, select those items that are in trends. You must be know how to select niche products for your offline or online store.
3. Keep full track on each and every item:
One of the best Inventory Reduction Strategies is to keep track on your inventory. But the problem is that companies don’t track their present stock. They don’t want to upset their customers by running out of stock. Hence they end up stocking anything and everything in order to meet the customers need. As a result, they get to forget that their inventory is overloaded.
So, the solution is to use some inventory management software for your inventory. This software will cover your all the tasks related to your inventory. Which and how many products are available, orders, shipment, delivery, return, refund etc. all tasks can handle by this software.
So, the single most Strategies for Reducing Inventory Costs is to use technology to accurately track what you have in inventory and how much it is costing you.
4. Drop Shipping business model:
One of the best Strategies for Reducing Inventory Costs is the Drop Shipping business model. It is not a new concept while running since the 1960s. But for some new sellers, it may be a new term, so don’t be sad. I am here to give you all detail about DropShipping.
Drop shipping is nothing but only an inventory-less business model where you don’t need to keep your own inventory or any stock of products. One thing must be clear that this business model is for online selling. Hence, online selling is its own benefits nowadays and this benefits will be more if you are using Dropshipping for your online store.
To understand a Dropshipping business and how does it work, I am considering a leading online platform. It is the Bigly, an online platform which offers a complete solution for your online store.
Now we talk about its working model: Supplier, Reseller (you), Your customers and Bigly.
Supplier: One who is the manufacture of goods and looking for one who can sell these goods easily.
Reseller: Actually, this person is you and I hope you may have your own eCommerce website. And you are looking for the products for your online store to sell.
Customers: Those customers who want to purchase items from you through your online store.
Bigly: Bigly is the place where you (seller) can find thousands of suppliers across the nation.
Now, there are thousands of sellers and suppliers who waiting for you. Bigly connects sellers and suppliers to each other. When a customer places an order on your (seller) online store, Bigly delivers the same product from suppliers’ warehouse to your customer’s doorstep directly. As a result, you have made your profit without having any inventory or physical products in your hand.
You may think, what is new in this model. Also, it may be an awkward thing in the first face. If you really don’t know about this model, then don’t worry. Your friend is here let you know about all things.
Actually, Bonobo’s model is the combination of the offline and online store. In this model, you can find a brick-and-mortar shop as well as an online store. Customers go to the offline store just for trial before purchase. If the customer became satisfied with that product, then he/she can place an order through seller’s website. Hence, the products will be delivered to the customer’s address within a prescribed period.
As a result, Inventory Reduction Strategies were working in this model. How?
In this way- you have only limited edition for a sample at your offline store. Means you don’t need to have more stock of the particular item. The only one-one sample of each item is enough just for the showcase. Hence, by doing this, you have reduced your inventory and inventory cost also.
In fact, only these five are not the Inventory Reduction Strategies. But all the Strategies for Reducing Inventory Costs can’t be included in a single writing.
If do you have any Inventory Reduction Strategies in your mind, kindly share with us by simply putting your words below in the box.