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The pandemic and its resultant economic challenges have reduced the amount of money available. When money is tight, customers want more for less. As people have relocated over the past couple of years due to the pandemic, many areas have experienced stockouts since the inventory in those areas was not ready for this shift. Other than population-based demand changes, retailers have also been anticipating demand shifts because of an increase in online shopping and other shopping trends. Retailers have to reevaluate their inventory strategies and consider reducing costs to achieve success. To stay in the game, businesses should consider reducing inventory costs. Given below are some steps that can be taken to reduce inventory costs.
Order large quantities
Some businesses provide volume discounts on products. If a business has sufficient storage capacity, it is a good idea to order large quantities. That way, a business has to pay less for items, reducing costs. Employee time is also not wasted in recording and checking in multiple orders.
Order product groups
Sometimes, components may turn out to be more expensive than product groups. For instance, some suppliers in the computer industry charge more for a mouse or a keyboard purchased individually than when these are purchased together as a group.
Get rid of old products
Some businesses have old products that haven’t been sold in years. These products take up space and may also be a turnoff to some customers. It may be necessary to get rid of these old, unpopular stocks. These products may be donated to a charity or they may be sold to customers at a steep discount. Not only will this help to recover the product investment, discounted products also help to generate some excitement among customers. These products can also be given away. Each time customers make a significant purchase, they can be given a choice of products. These items can also be used as incentives or rewards to close sales.
Set up automatic re-orders
Automation is possible for all kinds of businesses. Automatic re-orders make sure that a business is not left with shortages. Using software combined with a perpetual inventory system helps to prevent such costly shortages. An inventory management system gives all the updates that track inventory to determine when the supplies are running low and when it is time to reorder. Last-minute rush orders are expensive to ship.
Have an organized warehouse
To efficiently sort inventory an organized warehouse is needed. An organized warehouse also prevents the staff from spending hours looking for a specific item. In an organized warehouse, inventory can be stored and located in a quick and efficient manner. This also helps to speed up the order fulfillment process. A cluttered warehouse increases travel expenses and also the likelihood of damaged or misplaced inventory. Fast-moving items should be kept up-front as this speeds up the pick, pack, and ship process.
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