As a business owner, you have a lot on your plate. There are countless demands on your time, and any mishaps can cause a lot of stress for you and a burden on your company. Many of these mishaps can occur in inventory. The possibility of these circumstances is known as inventory risks. These risks involve being unable to sell products, leading to a loss in value. However, there are ways to lower these risks and avoid trouble with your inventory.
Here are three inventory risks as well as advice on how to avoid them.
An unreliable supplier can cause a lot of problems for the state of your inventory. If products arrive too late, fulfillment and shipping will be late, and your customers may be left dissatisfied. If products arrive too early, you may run out of space for your inventory which can also slow down the process.
This problem can be fixed, or prevented from happening, by communicating with your suppliers. Make sure they are aware of your business’s specific needs. Outline delivery expectations clearly, and layout contracts to ensure reliability.
Inventory Forecasting Inaccuracy
The life cycle of a product spans from the time an item first becomes available to when it is no longer sold. Items generally do better earlier on in the cycle. While the product is new, demand is high, but the longer it is left on shelves, the more demand declines. When demand becomes low, the lifespan of the product is almost over because supply is likely to beat demand. This is where forecasting becomes essential.
In order to know how much stock to have on hand and when to make new orders, you must be able to forecast customer demand and sales. If your forecasting is off, and you do not end up with enough stock to fulfill all of your orders, you will end up losing sales. Not only that, your customers will be left unhappy, and you could risk losing their loyalty as well. You will also run into problems if you overstock your inventory. Excess inventory can tie up warehouse space which is needed for other products. It also means you might lose money if your supply outweighs demand.
The best way to prevent forecasting inaccuracy? Inventory tracking. While this may seem like a fairly simple solution, it can easily be overlooked. By accurately tracking the amount of stock you have, what resources you are using, what is left on the shelves, etc., you will be able to come up with an effective inventory management solution and properly forecast demand.
To help establish a successful inventory management system, consider using a third-party logistics (3PL) provider such as Smart Parcel 24/7. High-quality 3PL providers have technology and systems already in place to store and keep track of your inventory as well as make accurate predictions of what is needed to supply customer demand.
Damage and Loss
Damage to inventory can happen for a variety of reasons. Poor storage conditions and mishandling can lead to broken items which in turn causes a financial loss to your business. Poor inventory management, insufficient software, and mistreatment of products can also lead to losses in your inventory. This is obviously problematic for your business, but it can be solved.
In order to prevent these issues, be sure to lay out specific inventory protocols, and ensure that your staff is fully trained. Reliable 3PL providers such as Smart Parcel 24/7 can also help in this area by supplying safe storage environments, staffed with fully-trained experienced employees. Warehouses equipped with modern tracking systems and software will also help to ensure none of your products are lost.
Smart Parcel 24/7 has warehouses across the United States. This ensures that no matter where your customers are located, we will be able to fulfill their orders in a warehouse near them—ensuring faster shipping speeds. Highly-trained staff and modern technology allow us to fulfill your orders to your exact specifications, all the while keeping your inventory safe and securely monitored.
We are not simply another mail carrier. We have access to a vast worldwide network of carriers, so we can pick-and-choose which one ships each of your products to ensure the fastest delivery times and best prices for your business. Whether it’s safe and efficient product warehousing or the most reliable shipping solutions, Smart Parcel 24/7 has it covered.