Proper inventory planning should be at the heart of every retail business.
After all, it’s the secret to ensuring that you have just the right amount of stock to meet customer demand – without tying up much-needed cash in unsold products or constantly experiencing stockouts.
However, many e-commerce merchants struggle to get inventory planning right, leading to cash flow issues, missed opportunities and a damaged reputation.
As we launch our 7-Day Inventory Planning Bootcamp, let’s explore the three most common things retailers get wrong about inventory planning and provide practical solutions to help you turn things around.
1. Poor demand forecasting
Some retailers simply don’t have a system in place for forecasting demand. Others rely on manual, outdated systems which rely on spreadsheets and guesswork.
But for demand forecasting to be accurate and help you stay agile in a constantly changing marketplace, it must factor in historical sales data, seasonality, promotions and trends. That’s next to impossible to achieve without software on your side.
The fix: As a leading inventory planning tool, Inventory Planner by Sage reveals exactly which inventory to order and when, based on an accurate calculation of how much you will sell.
It creates forecasts based on supplier timescales, seasonality and promotions alongside historical sales data, which are then turned into easy-to-understand buying recommendations.
Inventory Planner helps you stay one step ahead of changing market conditions and avoid the risk of accumulating excess stock and stockouts.
2. Over-reliance on manual processes
One of the major mistakes lots of retailers make is sticking with the same old manual inventory planning approach that might have worked when starting out but isn’t suitable for a growing business.
Manual planning takes longer and is prone to errors and inefficiencies. It can also lead to a lack of real-time visibility of your inventory and supply chain. The impact of this can be huge, including operational bottlenecks, higher costs, and lost sales.
The fix: As your retail business grows and you add sales channels and new warehouses, your inventory planning becomes more complex. It’s essential to replace outdated manual methods of planning your inventory (such as using spreadsheets) with modern inventory planning technology.
3. Second-rate supplier comms
Good supplier communication plays an essential role in the success of your retail business. It helps ensure you get the correct items on time, which means well-stocked shelves, fewer delays and happier customers.
However, supplier comms is something that often falls to the wayside for busy merchants – often causing delays, errors and even increased prices.
The fix: Inventory Planner makes it easy to manage supplier communications.
The software lets you store and manage supplier information for all your suppliers in one place, so you can easily keep track of everything necessary to place efficient orders, maintain clear communication and ensure issue resolution. This includes contact details, pricing terms, order tracking, lead times and other inventory data.
Inventory Planner also supports collaborative planning between you and your suppliers, enabling joint forecasting, sharing of promotion schedules and synchronized planning efforts.
Ready to whip your inventory planning skills into shape?
Our new 7-Day Inventory Planning Bootcamp is available now.
Sign up if you want to:
- Prevent stockouts and overstocks like a pro
- Assess and analyze your inventory performance
- Order inventory on a budget with strategic tactics
- Learn what to look for a in a tech solution
- Master steps for sustainable success long-term
All the details are here.