Shipfusion Blog

Common Inventory Management Mistakes: Part Two

Choosing the right partner can make or break your company’s logistics, customer service, and repeat purchases. Using a fulfillment center like Shipfusion frees you from navigating the fulfillment landscape with zero stress. Below are some insights on how Shipfusion can take your business to the next level.

There are many common inventory management mistakes that can lead to inventory shrinkage. Some of the most common mistakes include:

1. Not knowing what you have in stock: This is a mistake because if you don’t know what you have in stock, you can’t make informed decisions about what to order. This can lead to overordering, which can tie up your cash flow and lead to inventory shrinkage.

2. Not tracking your inventory: This is a mistake because if you don’t track your inventory, you can’t know when you need to reorder. This can lead to stockouts, which can lose you sales and damage your reputation.

3. Not keeping your inventory organized: This is a mistake because if your inventory is not organized, it can be difficult to find items when you need them. This can lead to lost sales and wasted time.

4. Not setting up proper security: This is a mistake because if you don’t have proper security in place, your inventory can be stolen. This can lead to a loss of revenue and an increase in insurance premiums.

5. Not having a plan: This is a mistake because if you don’t have a plan, you can’t be sure that you are making the best use of your inventory. This can lead to lost sales and wasted inventory.

6. Obsolete Inventory: Inventory management is vital to the success of any business, but it can be a challenge, especially when it comes to obsolete inventory. Obsolete inventory is inventory that is no longer needed or used by the company. It can be outdated products, excess inventory, or simply products that are no longer selling.

While it may seem like getting rid of obsolete inventory would be a no-brainer, it’s not always that simple. In some cases, businesses may be hesitant to get rid of inventory because they’re hoping that it will eventually sell. Other times, businesses may not have the resources to properly dispose of the inventory.

Whatever the reason, holding onto obsolete inventory can cause a number of problems for businesses. For one, it ties up valuable resources that could be used elsewhere. It also creates clutter and can make it difficult to find the items that are actually needed.

7. Stockouts: A stockout, also known as an out-of-stock (OOS) situation, occurs when there is a lack of available inventory of a product. This can have a significant impact on inventory management, as it can lead to lost sales, customer dissatisfaction, and even production stoppages.

There are a number of factors that can contribute to stockouts, such as incorrect forecasting, supplier issues, and unexpected demand. In order to avoid stockouts, it is important to have a good understanding of your inventory levels and to have a plan in place for dealing with them.

Some of the ways that stockouts can affect inventory management include:

·  Lost sales: If a customer goes to purchase a product and it is not available, they will likely go elsewhere. This can lead to lost sales and revenue for the company.

·  Customer dissatisfaction: Stockouts can cause customers to become dissatisfied with a company, as they are not able to obtain the product they want. This can lead to them taking their business elsewhere.

·  Production stoppages: If a company uses a product that is out of stock in their production process, this can lead to production stoppages and delays. This can have a ripple effect on the rest of the supply chain.

·  Increased costs: Stockouts can lead to increased costs, as companies may need to expedite shipments or find alternative sources for the product.

Avoiding stockouts is crucial for any company that wants to maintain a good inventory management system. By understanding the factors that can lead to stockouts and having a plan in place to deal with them, companies can minimize the impact on their business.

Another issue with obsolete inventory is that it can give the impression that the business is doing poorly. Customers may see shelves full of outdated products and assume that the company is struggling. This can lead to a loss of business and further financial problems.

The best way to avoid these issues is to have a well-defined, robust inventory management system in place. This system should include a process for disposing of obsolete inventory in a timely and efficient manner. By doing so, businesses can avoid the problems that come with holding onto inventory that is no longer needed.

By avoiding the common mistakes outlined here, and addressing your inventory management shortfalls with proper, well-thought-out strategies, you can help to ensure that your inventory is managed effectively and efficiently to offer your company the best chances of success.


Shipfusion sets your business on autopilot and combines flexible, reliable fulfillment with powerful, real-time technology. Shipfusion has multiple fulfillment centers across the US and Canada– making it easy to manage your eCommerce business. For more information on how to set your business on autopilot, contact one of our fulfillment specialists today.

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