What you don’t know about your inventory can hurt you. Indeed, from a bird’s eye view, lack of inventory control can hurt the entire retail industry.
How bad inventory control can cost you
A lack of inventory control can cost you a lot. In fact, the US retail sector lost nearly $2 trillion a year because of inadequate stock management. And that number was only expected to increase over time. Ultimately, every brand needs to optimize its stock levels to stay competitive. But without control, they’ll keep paying the cost of carrying too much or too few of their products.
Overstock and markdowns
Fashion brands are especially susceptible to the costs of carrying too much of a product. Taste changes faster than the seasons do. Thus, there’s a finite window for brands to get their products out the door. If those products don’t sell, the cost of holding them in the warehouse will rise, eroding profit margins. The only option left to many retailers is to sell at markdown simply to reduce holding costs. Inventory control leads to better planning, carrying the right amount of stock and avoiding markdowns. For example, that kind of inventory discipline led Urban Outfitters to see its lowest markdown rate in years.
Stockouts and double-sales
To the other extreme, inadequate inventory control can lead to stockouts and double selling. Without good data, brands can make inventory decisions based on their gut. Thus, they may spend conservatively to preserve cash flow, and end up stocking up on something that sells out way before they expected it to. And without data that flows between channels, they can end up selling a product on their website without realizing they’d just sold their last one on a marketplace. In either case, a brand may not just lose a sale. They can lose a potential repeat customer.
Centralize for Control
Commerce today is no single-channel proposition and that makes inventory trickier to manage than ever. Brands don’t just need their historic sales data to help optimize stock in the future. They also need to see what’s in stock now, to know when to reorder fast selling items and to avoid selling the same product on two different channels. That’s where centralization is key, and that’s what Cin7 does. Cin7 integrates every channel and location where a brand sells and holds its product. Click below to learn more about how Cin7 can help improve your brand’s inventory control.
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