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Three Potential Pitfalls of Improper Inventory Management

1 year ago
Dotcom Distribution

Despite the importance of proper inventory management, many brands fail to track and organize their stock keeping units (SKUs) with any consistency. While this does not always pose a problem early on during a brand’s lifecycle, it can cause severe repercussions as growth escalates. Effective inventory management is the first step toward long-term, omnichannel success.

Inventory management is the lifeblood of a healthy business. The stronger the flow, the better the entire system functions. And it all starts with the beating heart of the operations – you.

Begin by asking – are my inventory management practices as efficient as they could be? If not, your brand will have a tough time leveraging these three big business opportunities:

Wholesale: Wholesaling is smart for brands. However, it’s nearly impossible to do without a firm grasp of your inventory. The technology necessary to sell wholesale mandates that your inventory be organized in a systematic way. When partnering with a Nordstrom or a Macy’s, an Excel spreadsheet will no longer cut it.

Solution: Maintain your inventory with SKU management. This might seem like an obvious task, but it’s one that many brands bypass during periods of rapid growth. Basic tools like barcoding are the foundation for growing your brand and simple automation of these features gives you more control over your inventory as a whole. Here, partnering with an industry-proven distributor is a great way to work with third-party vendors. These teams already know how to manage SKUs, have experience with the wholesaler systems used to communicate with vendors and can offer your brand key insights and analytics to shape future fulfillment decisions.

Going Global: As your brand expands globally, it’s likely that your eCommerce presence will outpace your brick-and-mortar storefronts. For those consumers who can only interact with your brand online, a strong digital presence begins with an up-to-date inventory management system. Your eCommerce inventory needs real-time representation and reliable precision so that users will have an enjoyable rather than a disappointing shopping experience.


Solution: Enhance your inventory with velocity analytics. When customers shop online, they expect products to be available and ready for delivery. Velocity reporting ensures that these standards are achievable by matching your inventory with real-time purchasing actions. Consumers will have access to the same digital inventory no matter where they are, or what channel they are shopping on. This prevents over-selling one item or under representing another.

The Holidays: Peak season holiday shopping is one of the largest growth opportunities for retailers. However, lacking a real-time view of your inventory, you will not be able to scale holiday orders with the speed or accuracy that the time period demands. As such, you will miss out on huge sales growth and brand exposure.


Solution: Manage your inventory with cycle counting and ABC logic. Rather than counting your entire inventory all at once, routinely track with a pre-determined count calendar. Also use ABC logic, meaning that A inventory (fast moving SKUs) get counted more frequently than B and C inventories. This ensures that – moving into peak seasons like the holidays – your most valuable SKUs are counted with greater accuracy. The method also streamlines inventory management and can help retailers identify purchasing trends. Noticing key trends can help you anticipate upcoming holiday inventory needs.

In order to capitalize on all three of these markets, your brand’s inventory management has to start and stop with you. Create an atmosphere where tracking inventory is not important, but expected.

Like any habit, managing your brand’s inventory gets easier over time. That’s why all retailers can benefit from taking a close look at their inventory practices right now. Those who do will earn a competitive industry advantage and gain the dexterity to align their inventory management with changing marketplace needs.