Top 5 inventory management strategies to boost productivity in 2021
Mastering the technique of inventory management is very crucial for e-commerce retailers.
In today’s times, Customers will not wait for your stock to arrive, instead, they will go to other platforms to look for items they didn’t find in your store.
As we know, Selling out of products is massively harmful to your overall sales.
Likewise, having overstock is also a wastage of resources and a blow to your cash flow.
Hence, it is very essential to have an effective inventory management strategy in place to ensure that you have enough inventory to meet your customer’s needs.
We have previously shared the tips to manage your inventory in one of our blogs. We will now move a notch higher in this blog to discuss the inventory management strategies for your store.
So, let us roll in!
Inventory management strategies
- The Push strategy
To begin with, The push strategy is the kind of strategy that focuses on pushing products directly from manufacturer to warehouse or store without engaging any distributing channel.
From there, customers can buy them from the inventory on hand.
For the successful implementation of this strategy, you should accurately forecast the demand.
Accurate forecasting can be obtained from CRM like Salesforce that can give an insight into the customer behavior and the inventory records.
- The pull strategy
The pull strategy is the reverse of the push strategy. Unlike the push strategy, products from manufacturers are pulled down to store only when there is a demand for the said product.
However, This strategy works out well when you are dealing with very expensive or specialty items.
- Just in time strategy
The Just in time strategy is a lot like the pull strategy where businesses procure products from manufactures just in time, as per demand.
This strategy helps to reduce inventory costs as businesses order less inventory to avoid dead stock and improve cash flow.
Again for the strategy to work, you need to have accurate planning and forecasting.
- FIFO and LIFO
FIFO means First In, First Out. An important principle of inventory management, this strategy says the oldest product should be sold first.
It is a great way of keeping your inventory fresh especially, for perishable items.
LIFO, on the other hand, means that Last in, First out that believes newer goods are sold fast.
Assuming that prices are constantly rising, LIFO refers to the last purchased goods as high priced.
A high purchase rate means less profit and hence, low-taxable income. That is why Businesses mostly prefer LIFO over FIFO.
- CRM software for inventory management
A CRM system can help you understand your customers better, managing sales, tracking sales pipelines, and providing accurate forecasting.
Accurate forecasting is the basis of management strategies.
Therefore, Managing inventory with a CRM like Salesforce will help you to organize your inventory and boost productivity.
Shopify Made Easy is one such app that not only integrates your store’s legacy data with that of Salesforce but also provides a unified platform for you to manage your inventory seamlessly.
One of the most popular Shopify-Salesforce connector apps, this app is quick, simple, and secure for data migration.