High-growth is the goal for most retailers, but there is a downside.
Rapid scaling inevitably leads to increased operational complexity, especially when it comes to planning and managing your inventory.
For larger, high-growth firms, finding inventory strategies that support agility and boost cash flow is essential for sustaining growth and staying ahead in a tricky, competitive market.
However, it’s not just about having any old inventory system in place; retailers must invest in strategies and solutions that truly support scalability.
Many firms learn the hard way that pouring resources into software that lacks the capacity for growth or the essential features needed for the next stage of expansion is a short-sighted move that often ends in disaster.
This blog will explore a range of game-changing inventory strategies to help you maximise every penny you spend on inventory and turn your rapid growth into long-term success.
1. Customize your inventory reporting
Inventory reports offer insight into inventory performance, which is vital at any stage of growth. However, dense reports that are overly-complex won’t do. To maintain and build on your growth, you need customizable reports with insights that your whole team can understand and act on.
Inventory Planner customers can choose from more than 200 metrics, including overstock costs, forecast lost revenue due to stockout, profits, net revenue to create truly customized, powerful reports.
This is fundamental information that enables retailers to ensure the right inventory is always ordered at the right time, while avoiding cash flow killers like stockouts and overstock. It also means trends can be spotted early and mistakes can be avoided, which adds competitive advantage.
2. Choose seamless integrations
As your retail business grows, it will typically require more tools and apps to keep running smoothly. However, it’s absolutely critical that all your chosen software works seamlessly with the other tools and systems you use, such as your retail operating system, warehouse management systems, order management systems or ERP.
Without native integrations to unify your tech stack, your system is likely to slow down or become glitchy when inventory peaks or sales spike.
Fortunately, Inventory Planner offers a huge library of Plug & Play integrations to more than 30 leading platforms. The Shopify integration is pre-built and proven to be scalable by thousands of fast-growing merchants worldwide.
Once you have flawless connectivity on your side, you can be sure your system will be fit for purpose as you grow in 2024 and beyond
3. Generate and autofill purchase orders
The more your business grows, the bigger or more frequent your purchase orders are likely to become. Manually creating these purchase orders can become a huge drain on time, as well as being error-prone and tedious.
The solution is to automatically create intuitive purchase orders – it’s a functionality Inventory Planner customers find especially game-changing. The software makes it possible to create POs directly from your replenishment report, which clearly flags the exact variants that need to be reordered based on highly-accurate demand forecasts.
It’s a massive time saver, but it’s also a way to avoid the risk of over or under-ordering.
4. Start ‘Open-to-Buy’ supply planning
Smaller retailers and start-ups can get away with not having Open-to-Buy (OTB) functionality. Larger, fast-growing merchants can’t.
OTB helps you calculate how much cash is needed to buy inventory so that you can meet customer demand and your revenue goals while maintaining a positive cash flow.
OTB planning factors in growth targets, including the percentage by which you want your year-on-year revenue to increase. It removes the guesswork and shows growing brands exactly what they need to spend on inventory to meet their goals.
There’s a formula for manually calculating OTB that anyone can use:
OTB = planned sales + planned markdowns + planned end of month inventory – beginning of month inventory
However, the faster and more effective way to calculate OTB is by using dedicated software. Unlike other basic inventory planning tools, Inventory Planner includes OTB functionality as standard.
5. Improve supplier management
If you have multiple suppliers, perhaps in various parts of the world, it can be tough to keep track of them all unless your system displays accurate details in one central place.
The right inventory planning software offers this functionality. For instance, Inventory Planner provides details about products currently on order or in transit, the costs, payment terms, and shipping methods – plus contact information, transaction history, and handy notes about each supplier.
As your business scales, having access to real-time information about your orders and an easy way to communicate with suppliers can make all the difference to your supply chain and even help you secure discounts and deals.
6. Protect your data
Security is a crucial aspect of any tech stack, and only becomes more essential as your business (and your inventory) grows.
Choose an inventory planning system that offers full encryption and two-factor authentication, such as Inventory Planner. Then you can feel secure that your (and your customers’) data is protected against a data breach.
7. Understand your Inventory KPIs
In an ever-evolving retail landscape, it’s vital that you know exactly how your inventory – right down to each SKU – is performing. Which items are selling well, and which could be ditched instead of taking up space on your shelves and becoming obsolete? It’s also important to know the value of your stock at any one time.
Your inventory planning or management software should be able to clearly illustrate KPIs such as profit margin by sales channel and location. It should also allow you to accurately track variable inventory costs, like courier fees or production wastage.
With the right insights in your toolkit, you can make data-driven decisions as your business continues to grow.
8. Get alerts for low stock
When you are running a multi-channel, multi-region business with a growing inventory, it’s surprisingly easy to run out of stock – especially when a new trend emerges out of nowhere.
However, with the right scalable software, you can get proactive alerts for key events, such as when stock is running low or if a product is selling slower than anticipated.
The best inventory planning software, like Inventory Planner, uses inventory forecasting to automatically calculate preferred stock levels, lead times and reorder points – and even goes ahead and purchases new stock when needed, saving you more time and avoiding the risk of a costly stockout.
See for yourself how Inventory Planner can support your growth – book your free demo now.