As an online seller, inventory management is top of mind, and you may have dealt with slow-moving inventory at some point in time. When it doesn’t move, there are a lot of consequent costs that eventually tie up to resources and capital which could have been used to invest in your business.
What You Need To Know About Inventory Management!
Slow Moving Inventory (SMIs)
Slow-moving inventory differs from item to item as well as seller to seller. It can be broadly defined in these three ways:
1. Stock Turns
Most large retailers consider stock turns as SMIs. Even though a higher stock turn is better, some underlying issues may slow things down. For instance, ordering large quantities of stock will ultimately slow down stock turns. This makes it important to account for per unit cost when using stock turns to identify SMIs. It is also impractical to expect large stock turns when dealing in large inventories to cut down per unit costs.
Other companies define SMIs as items with less than 6 months of demand over the period of a year. This points to overstocked SMIs without considering the frequency of shipping.
3. Frequency Of Shipping
The easiest way to define SMIs is through the frequency of shipping. Being unable to ship any item from a specific SKU over a period of 90-120 days could mean it is an SMI.
Once you are clear on how you can define SMIs for your particular business, you can move on to identifying the right procedures to take care of it.
Dealing With SMIs The Smart Way
They may be taking up valuable space at a warehouse and slowly eating through your capital. Use these ways to deal with SMIs smartly:
- Use images – How do the items look on your website? Could bad imagery be the key player behind a particular SMI? Add in professionally captured images with the help of a product photographer.
- Descriptions – Descriptions are an important selling point. Some product details for SMIs may be lacking details and not providing clients with enough information. Include each and every feature in the description.
- PPC/SEO – How do you rank on search results? Maybe a particular slow-selling category of products needs to be optimized to show higher in search results. Consider going for pay-per-click advertising along with a sound SEO campaign to highlight SMIs.
- Promotions – Sales, bonus items, discounts, deals of the day; all of these promote SMIs. Try out these promotional strategies.
Typically, SMIs can prove detrimental to your ecommerce business. Compared to competitors who have outsourced order fulfillment procedures, you could be dealing with a growing number of SMIs as well.
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.