If you’re looking for some time to take a break from your eCommerce business inventory management hassles, then you have landed on the right article.
Well, it’s not that easy to shun the whole inventory game because everything starts from there. Whether it’s reviewing customers’ requirements, reviewing stocks, or making sure everything is in place—everything starts from your inventory.
With the help of dropshipping inventory management plan, you can work on your customer acceptance rate, quickly convert your orders into sales & issue a drop-ship purchase order to your supplier.
So, are you ready to deep dive into inventory management benefits?
What is Dropshipping Inventory Management?
Inventory management is also defined as stock, a method to source, store, and sell inventory. It refers to both physical goods, other raw materials, and finished goods or products.
Inventory management involves the right kind of stock, a primary revenue source, and is always present at the correct cost and price.
It can be presented in few groups
- Finished goods: Yes, the good that is ready for sale
- Goods for sales: Goods that can be resold if needed
- Raw materials: The components used in making a product
- Under progress: Materials that are being made and are work in progress
Being free of any inventory stress is the winning feature that attracts many businesses to dropshipping. Yes, it saves your time and money and provides you time to focus on new marketing campaigns and attracting customers.
5 Benefits Of Dropshipping Inventory Management To Help You Save Money
We all understood the importance of inventory management. But saving money is another major deal for a dropshipping business, for your wholesale suppliers, for more efficiency and convenience shipping products to your customers.
As per Forbes, many well-known dropshipping stores, after spending thousands of dollars, often make between 20% to 30% of your profit. So, it is essential to take note of the benefits of dropshipping inventory management.
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Eliminate Distressed Inventory
Reducing inventory that is no longer related to the market can save you many problems, money, and time. When a company overstocks products that will soon vanish from the market, they run the risk of losing the money they spent on the products in the very first place.
Also, if you do have overstock items, you can reduce the price to offload them.
And this may be a weird step, but you will not regret making this decision in the long term. Ultimately, you’ll decrease the costs and free up space to store more profitable and new products.
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Increase / Decrease Your Ability To Meet Demand
The B2C community takes 12 positive customer experiences to frame up for one negative experience.
To improve inventory performance and your productivity, invest in inventory management devices, such as barcode scanners and inventory management software. This can save your time and future capital also.
You don’t have to hire new people or employees for such processes. It removes manual labor so that you and your team can focus on more critical tasks. If you can automate most of your restocking process, it will increase your product delivery quality, supplier lead time, and more.
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Manage Supplier Relationships
Use different techniques to grow your relationship with your suppliers because it benefits you in the long run and helps you save money and keep track of information about the suppliers.
This way, you can rely on them and work more effortlessly. If your relationships become solid and deep, it becomes easier to communicate, fix issues fast, and update both sides. In short words, it helps you to plan, work and scale your business.
Always remember price is what you pay, and value is what you get.
You can buy your products in bulk and do some negotiation which will save your capital. There are more such creative ways to build relationships and save money while providing value.
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Prioritize Products
The fourth approach is prioritization.
This means you need to fulfill those orders first that you’ve identified to be the most critical and essential. However, they’re not always going to come from good or valuable customers. For instance, you can’t sell thousands of units on every product —or you can’t do it so quickly.
But you do have other people who want to buy the same product but are small in numbers. In this case, it may be wise to prioritize the orders of the minor or unknown customers who sometimes buy.
You can use various factors to determine how you can prioritize customers in a situation like this.
- How critical is a particular item to the supply chain?
- How soon your order needs to be filled?
- Whether your customer will allow a replacement for this product?
- Whether Are you low on stock or in danger of running out of stock?
Answer these questions, and you are there.
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Accurate Forecasting
Forecasting inventory can be primary for people who don’t try to make it a complex process. As a simple rule, the more experienced your inventory forecasting techniques, the more precise your predictions will be.
It allows you to serve your customers effectively, fulfill their needs without investing capital in large amounts in stock. Thus, saving more money. It lowers your overall operational costs.
Final Word
Despite the cost-saving attractiveness of dropshipping process, it’s essential to focus on inventory management, automating it for more efficiency and more visibility of your brand.
It can be challenging at the start, so why not start with the basics first?
Interesting Related Article: “Why Should Wholesale Business Use Inventory Systems?“