The practice of controlling your whole inventory for Shopify businesses to make sure you have the proper number of items to meet client demand and supply is known as inventory management. This is crucial because it will let you keep a check on your inventory to make sure there isn’t too much or too little of it, and it will also let you make better judgments, which will let you confidently complete sales and satisfy customer expectations.

Here’s how to manage your Shopify inventory efficiently so that you may outperform your competitors.

Keep All Dead Stock Out

One of the most expensive blows to a company’s bottom line comes from dead stock. It’s vital to make the most of your goods as possible once it reaches this phase because dead stock is almost always an issue. You can do this by making lucrative package offers, selling to businesses that specialize in liquidations, or making tax-deductible donations to charities.

The best course of action, however, is to completely avoid dead stock. To achieve this, figure out how much stock you need by using your knowledge of your inventory and consumer behavior. This will require a combination of capable analysts and the appropriate hardware and software.

For example, it would be wise to have a professional Shopify inventory management software integrated into your system to help you keep track of your stock and notify you about any dead or rarely sold stock that you hold. However, if you’re a startup and don’t have the budget to get software from the get-go, set a modest goal for yourself. For instance, if there is little demand, releasing a new product or selling seasonal products may require less inventory to ensure smaller hits. Be smart about your inventory and keep all dead stock out.

Reduce Storage Expenses

Your storage expenses will increase if you store too many items at once or manufacture a product that is hard to sell. Because dead stock may add up in storage expenses, handling it could be beneficial in this situation.

To guarantee that your items flow naturally through the process, keep a close check on your inventory at all times. To decide which things to add to your inventory and which to reduce or even remove from it, you’ll also want to keep track of what isn’t selling.

Improve Cash Flow

If you don’t pay enough attention to your Shopify inventory, you run the danger of having money invested in products that aren’t selling and are costing you money to store. The only way to increase your cash flow and keep reaching your full online potential is through inventory control.

To identify which items are negatively affecting your cash flow and which products are assisting in the expansion of your business, you must pay close attention to all of the following:

• A glimpse of the month’s inventory;
• Negative inventory numbers;
• Average daily inventory sold;
• Sold-out percentage of inventory;
• Analysis of ABCs by-product;
• Sell-through rate for products;
• Days left on inventory.

Work On Your Delivery Efforts

Finding a fulfillment partner who can expand enough along with your business and ever-changing demands is difficult. It’s crucial to spot the warning signals of outgrowing your 3PL and take the required action to satisfy customer expectations and improve your fulfillment process.

Other techniques for improving Shopify’s 3PL fulfillment include:

• Providing self-service alternatives to your clients will enable them to track their orders in real-time and learn when they will be delivered.
• Removing time-consuming, manual stages from your business flow. Time can be significantly reduced only by eliminating minutes of laborious effort on several activities that can be automated.
• Acquiring the proper software. Software solutions are designed to make repetitive decisions easier for you, lessen human error, and increase the efficiency of the overall process. By making use of software, you may maximize the pleasure to the fullest extent possible, and keep your inventory on par.

Keep The Optimal Sell-Through Rate

Evergreen items tend to sell less quickly than seasonal ones. To reach the desired sell-through percentage, you shouldn’t constantly rely on discounts and promotions. Instead, focus on the Product Sell-Through Rate Report from Shopify.

The proportion of the entire inventory you sold within a certain period is indicated in the report. The data is important even if it is normally two to three days out of real-time.

Consider Using A FIFO System

FIFO, or first-in, first-out, is a widely used inventory management strategy. It is intended to prevent merchandise from rotting, collecting dust, or even becoming outdated.

You may prevent some of these problems by making sure that your oldest items are the first to sell. To move those older goods ahead of the newer ones in your store’s front-end sales strategy, you may need to manage your inventory manually.

Final Thoughts

To satisfy consumer needs, avoid inventory waste, and control your inventory expenses, your Shopify business must have an inventory management procedure in place. A sound inventory management procedure can also assist you in keeping correct books so you can properly account for your inventory expenditures. Trust us, you’ll need these records to make critical business choices, close funding for your store, and file your tax return.