Wholesaling or purchasing goods from manufacturers that then get sold to other businesses can get very tricky and logistics can get out of hand. Wholesalers have faced such challenges in recent years and this is only expected to continue. For this reason, inventory management has become a crucial piece for every industry, from manufacturing to retail, as it puts businesses in a much better position to procure enough inventories, fulfill orders on time, and build strong retail partnerships.
Inventory management is the heart of successful businesses and plays an important part in their profitability. It gives them complete visibility into the inventory process from start to finish, from material sourcing to warehousing and distribution which, in turn, helps eliminate any type of guesswork and instead provides businesses with valuable data to prevent possible overstocking or stockouts.
From improving accuracy to lowering expenses, effective wholesale inventory management can help you meet demands and generate sales. To truly understand how it can help your business, in the article below, we take a deeper dive into the top 5 benefits of wholesale inventory management.
Accurate Inventory Counts
Not having an accurate tally of stock levels can quickly become frustrating and expensive. Knowing the exact number of units you have on hand ensures that your customers will not end up with short shipments and warehouse staff won’t have to waste time searching for a stock they believe is misplaced when in reality, it simply isn’t there.
To be able to manage wholesale operations more effectively, you should consider investing in a robust wholesale management platform as it will give you access to all up-to-date data and provide a centralized platform for managing inventory, orders, clients, and suppliers.
You’ll be able to save precious time by having it keep track of your supplier information, track your spending and budget, and provide you with real-time insight into your wholesale business performance with analytics and reports. Based on these analytics, you can make decisions on whether a certain item is becoming stagnant or obsolete in the market.
Improve Cash Flow
Proper wholesale inventory management is not only more cost-efficient but can also improve cash flow. Inventory affects sales and expenses directly and this factors heavily into how much cash you have on hand. Simply put, better inventory management means better cash flow management.
When you have a sound inventory system, you’ll know exactly how much product you have in real-time. Based on your sales, you can predict when you’ll run out of a certain product so you can replace it before then. Not only will this make sure you don’t lose sales, which is critical for cash flow, but it will also allow you to plan for buying more by ensuring you have enough cash set aside.
Better Planning and Forecasting
As we briefly mentioned above, by using wholesale inventory management, businesses can better predict future demands. When there’s a demand, there must also be a supply. Having little stock that is high in demand can lead to the loss of potential and loyal customers but with accurate inventory management, you can mitigate these risks.
When you compare historical inventory and sales data along with changing trends, supplier info, delivery, and lead time, you will be able to plan better and make the right procurement decisions.
Improved Productivity Levels
Wholesale inventory management can help you significantly reduce time-consuming labor-intensive activities, meaning that your employees will be able to focus on the most important tasks. This can improve warehouse operations by reducing the time needed to process, audit, and track the items.
Using the features within the wholesale inventory management system allows employees to quickly know where to locate the stock and the quantity improving picking and packing processes, which ultimately will speed up the order fulfillment process. Your sales team can take advantage of the real-life data of what’s available in stock, how much there is, at what price, and the expected lead and time of delivery to close a sale.
Superior Customer Service
Customer satisfaction is a key factor if you want to take your business to the next level. As there is fierce competition in a saturated market, it’s crucial to identify high-turnover items to ensure product availability at all times and meet the demands of customers.
Problems like late deliveries or out-of-stock items are negative experiences that can stop new customers from returning and they can also affect the retention rate of existing customers. This results in lost sales and revenues and if it goes on for a longer period, it can significantly damage your brand reputation.
From accurate inventory counts to improved productivity, effective inventory management is essential to avoid interruptions in business operations and achieve greater success. Inventory management provides full transparency to monitor the flow of goods and prevents having too much or too little stock.