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You know how a manual inventory management system works. It is all about continuous monitoring of goods, jotting down their details on a register, and still missing out some of the goods from getting tracked? Right? That’s what an ineffective inventory management system is.
New year, new possibilities. In 2020, management of inventory or stock has become more efficient thanks to the digital revolution. Now, ecommerce store owners can optimize their inventory to gain more profits with minimal loss on the financial front. Every business aims to have zero inventory because, in this state, the business has healthy cash in hand and a minimum or no inventory in stock.
We will discuss dead inventory in detail in the preceding paragraphs. If you want to learn about the new trends in inventory management; how to manage inventory effectively in 2020 by using the right tools, strategies, and processes, this article is for you.
What is Inventory Management?
Starting with the basics, here is how TechTarget defines it:
“… supervising the flow of goods from manufacturers to warehouses. Its function is to keep a detailed record of each new or returned product as it enters or leaves a warehouse or point of sale.”
In simple terms, inventory management is a process that requires businesses to keep track of the company’s goods both, at the time of receiving and at checkout.
Effective management of the store inventory helps businesses:
- Request a small quantity of goods available with the supplier.
- Figure out what type of goods have their expiry dates approaching.
- Pinpoint goods that are out of season – also called as ‘dead’ stock.
- Optimize warehouse space according to the storage capacity for the coming season.
- Keep more cash in hand while becoming cost-efficient.
- Use business intelligence functions to improve inventory operations, enhance fulfillment, and optimize prices.
The end goal of inventory management is to minimize inventory, maximize profit, and optimize the growth of the business.
Benefits of Effective Inventory Management
Here is how effective management of it can help your business grow and scale in the long-term.
- Inventory management techniques save you money
It helps you decrease losses by tracking what products are nearing their expiry dates. These products will be of no use to you if you keep them beyond their expiry dates. It is better to bring them to the front so online shoppers can buy them. If you don’t track your inventory automatically, optimizing the inventory will become a daunting task.
- Inventory management techniques improve cash flow
You can easily find out which products are fast-selling products and which ones are slow-selling products. You can create a strategy about which products to order and how much cash to keep
This article was written by Sajjad Shahid and originally published on The Official Cloudways Blog.