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.
Why is SKU tracking important
To appreciate why you need to incorporate SKU tracking into your business management system, it is important to have a look at why it is necessary. First, SKU tracking is a good way for you to get insights into certain aspects of your business.
For instance, SKU tracking can help you understand the margin of profits or losses you may be incurring. This information can be helpful in future planning and helps you come up with sound strategies to mitigate losses and maximize profits.
Second, SKU tracking also lets you know aspects of sales trends and possible future demand. With such information at your disposal, you are able to make plans that ensure you are not overstocking or understocking at any given time. At the end of the day, you will be able to have control over the flow of stock in and out.
In other words, you will know exactly which SKU to reorder at a given time and by how much. You are also able to determine the SKUs that are moving slowly and should therefore be avoided or reordered in a much smaller quantity.
The 5 benefits of SKU tracking for your business
Understanding some of the key benefits of SKU tracking can be all it takes for you to appreciate why you need to implement it for your own eCommerce or retail business.
Because SKU tracking gives you an accurate overview of how your business is doing, you are better equipped to deal with rising costs. You can easily plan for new stock without the danger of incurring extra costs due to urgent orders. It is equally important to note that you are able to use limited space better and this eliminates the costs you would have incurred in case of overstock.
2. Customer satisfaction
The last thing you want is to have customers queuing outside your warehouse or point of delivery only to realize that the products they need are out of stock. Proper SKU tracking allows you to know exactly what products are needed at any given time.
That makes it possible for you to make provisions for them beforehand. At the end of the day, your customers will receive the products they need at the exact time. This will increase customer satisfaction and ensure you win their loyalty.
3. Space management
With accurate SKU tracking data, you can easily predict stock demand at any given time. That means you are able to tell when a particular type of product is in season and when another is out of season. This information allows you to determine what types of products to restock at any given time.
The result is that you will be in a much better place when it comes to organizing stock within your warehouse or storage space. It is equally important to realize that some products require special handling and storage.
SKU tracking ensures that you are able to juggle between different types of stocks without running the risk of damaging products due to poor storage or handling.
4. Can prevent deadstock
As a retailer or eCommerce trader, you may have a huge variety of products just to ensure that your customers get what they need. However, a certain variety of products end up becoming slow when it comes to selling. There are even certain types of products that may not sell for a long time and risk going bad or becoming obsolete.
These are what is commonly referred to as dead stock. SKU tracking lets you get a deeper understanding of how each type of product is moving through the supply chain.
The information you get by tracking each type of product lets you know what is likely to become dead stock and that gives you enough time to come up with a strategy to sell off the product before it becomes dead stock.
5. Understocking and overstocking
Having too many pink nail polish bottles and only a handful of red ones can be a recipe for disaster when it comes to selling. SKU tracking lets you know exactly how many pink polishes are available against the red ones..
That ensures that you can quickly restock red bottles without running the risk of ordering more pink polish. A good SKU tracking system ensures that your stocks are running optimally which means you do not overstock nor do you understock any product.
Challenges that arise from SKU tracking
SKU tracking can become quite challenging as your stock grows larger. This means you are going to have to spend more time entering data into spreadsheets or any other computer program you may be using.
It can also be quite tedious to keep track of stock in different locations. Human error coupled with slow reporting can end up causing a lot of confusion. It is equally important to note that the more stock you have, the higher the chances of needing more manpower. That can end up becoming a costly affair.
Stay tuned next week to learn, How to Improve SKU tracking for your eCommerce business.
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.