What are the Best Ways to Manage Wholesale Inventory

What are the Best Ways to Manage Wholesale Inventory?

Managing inventory is one of the critical functions of any wholesaling business. If you are a wholesaler aspiring for success, you must manage and track your inventory accurately. In fact, 33% of businesses
will miss shipping deadlines because of selling items that aren’t in stock.

Therefore, effective inventory management puts you in a better place to get enough inventory, fulfill orders on time, and develop healthy partnerships. However, you risk hurting your business if you are careless with your inventory by under-optimizing it.

So, how do you optimize inventory management? What inventory management practices work for a wholesale business?

What is wholesale inventory management?

Wholesale inventory management is the process of acquiring, storing, selling, and delivering goods to your customers. As a wholesaler utilizing an inventory management system, your plan will revolve around knowing the number of goods you have in your warehouse. You'll also need to know what to stock in various locations. Why is it important?

Wholesale distributors usually purchase in bulk, so logistics could be complex if the wholesale business has multiple locations. These traders, therefore, manage inventories to ensure a smooth and streamlined operation. Some of the processes they ensure run smoothly include ordering, warehouse management, shipping, fulfillment, and delivery.

A good wholesale inventory system should be able to accurately and reliably track your inventory. Besides, it should predict your store's customers' demand for the products and ensure your inventory level matches this count.

By doing so, you won't lose your customers because your store is understocked. You don't also have to deal with dead stock because of excess inventory. Some of the best ways to manage your wholesale inventory to improve your customer satisfaction and increase sales include:

Use an Inventory Management System

For the longest time, wholesalers have relied on calculators and spreadsheets to manage their inventories. Spreadsheets and manual inventory management techniques will work for you, but only for a short while. As your business grows, you'll realize that manual inventory management isn't easy.

Thanks to the Erply POS system
, you can now manage your inventory using barcoding and inventory management software. The software is more efficient in optimizing your operations and dealing with employees. Some benefits of using Erply to manage your wholesale inventory are:

It allows your customers to place their orders and track their shipments
Synchronizes your inventory and order data across your sales channels
It reorders your stock on time depending on the reorder point calculations
The tool also stores your user account on your website through the website itself or a mobile app

The Erply software is efficient and cheaper than traditional software. You only need to pay monthly based on your business needs and can upgrade to more features as your business demands.

Have Low Inventory in Hand

Every wholesale trader knows just how important it is to have enough stock, especially during busy seasons. However, that doesn't mean that you should stock too high. Holding too much consistent stock is damaging your business because stock depreciates. The more you hold on, the more you risk incurring losses through dead stock and decay. Even more important is the fact that your working capital is held in stock, which might prevent you from investing in critical business operations.

Hence, holding low inventory
is necessary for your business’s success.

The solution is to incorporate an inventory management software tool. The technology predicts your inventory needs based on consumer demand, seasons, and company sales performance. You'll, therefore, always have sufficient stock to meet consumer demand.

Track Expiry Dates

Tracking the expiry dates of your products is important, especially if you are dealing with the food catering industry or any perishables. These products need to move fast as they get spoiled easily. Failure to sell them within the first week will force you to incur significant losses.

Try to avoid these ugly scenarios by keeping a close tab on the expiry dates using inventory management software tools. The tools give your items a barcode or QR codes with trackable expiry dates. So, you can prioritize selling items whose expiry dates are closer and save items with a longer shelf-life to sell after.

Keep Stakeholders Informed

Every business has stakeholders
. A wholesale business’s stakeholders include retailers, manufacturers, employees, the government, owners, and investors. Retailers, who are the customers, need to know your inventory practices so they can run their businesses without a hitch.

Manufacturers also need to be kept in the loop to ensure they plan how to meet your inventory demands.

Managing the inventory is a collective responsibility. So, keep the stakeholders informed about the system's practices. Help them understand how it works.

Use Cycle Counting

Some businesses count their stock more regularly while others take longer. The longer you wait to keep track, the more cumbersome it will be.

Instead of waiting so long to keep tabs on your inventory, why not do it in bits? Cycle counting
involves keeping track of your inventory regularly. The process involves categorizing the inventory, and allocating time for counting the items in different locations of the warehouse.

The main reason businesses invest in an inventory management system is to keep accurate inventory. Erply’s in-depth inventory reports will help you keep tabs on your inventory.

Optimize Warehouse Layout

Your warehouse layout determines how fast your staff will pack, pick, and get the items shipped. Optimizing your warehouse's layout is the first step to improving your operational effectiveness. Some of the warehouse layout tips you can consider looking into include:

Separate the packing and shipping areas from the rest of the warehouse to control the traffic flow
Have an elaborate map that includes things like doors and office during the planning stage
Try to increase your team's accessibility by keeping your picking area outside or next to your storage
Also, place the hot-selling and in-demand products near the loading area to expedite the inventory moving process
Test the space using a forklift or by walking through to see if it's enough
Finally, store your warehouse inventory in many places if you plan to scale your operation to different locations

Set Reorder Points and Keep Tabs on Them

Reorder Point (ROP)
is an inventory level at which a business must replenish its stock to avoid stock-outs. The role of ROP is to help you maintain the inventory at a level that consistently meets the consumers' demands. So, when the inventory level approaches an ROP, the replenishment procedure will be triggered to restock that item.

The importance of a reorder point is that it increases your efficiency. It helps you make fast and stress-free decisions about the inventory ordering process without starting from the basics.

Keeping a tab on ROP is essential because you'll know when to act when the inventory reaches a particular level. Reorder point is mathematically calculated.

Conclusion

Streamlining your wholesale inventory for effectiveness begins with improving your overall business operations. Therefore, adopt a holistic and tech-driven approach that automates operations, removing manual process and increasing accuracy.

Inventory management is also a collective responsibility. Hence, discuss automating operations and using software tools with your team. Most importantly, ensure your employees understand what the technology requires.

Once you have a good inventory management policy in place and have informed your stakeholders about it, you’re good to go.