Top 5 Strategies to Optimize Inventory

In a perfect world, ecommerce businesses have a well-stocked and organized warehouse with just the right amount of inventory to meet seasonal demand. But this requires careful inventory management and a well-organized and operated warehouse. The importance of inventory management in retail and wholesale can’t be overstated. When inventory is poorly managed, it can result in stockouts or warehouse overflow, safety hazards from overflowing shelves and crowded floors, high return rates due to fulfillment errors, delayed orders due to disorganized or missing inventory, lost sales/revenue, increased storage costs, and damaged customer relationships.

Optimizing inventory management for amazon sellers is a key driver of client satisfaction and operational profitability. Third party logistics companies (3PLs) leverage real-time Amazon inventory management, accurate forecasting, and FIFO inventory management to help their clients grow their businesses.

Top 5 Strategies to Optimize Inventory

The best way to optimize Amazon inventory control – and prevent having too much or too little inventory on hand - is to have several effective inventory management strategies in place, including this top five list:

1. Schedule An Annual Warehouse Spring Cleaning

A physical spring cleaning of your warehouse can be an effective reality check. Setting aside time each year to thoroughly clean, reorganize, and audit your warehouse, makes it easier to uncover outdated, damaged, or misplaced inventory that may be skewing your inventory reports. This annual reset also provides an opportunity to streamline storage layouts, remove clutter, and improve workflow efficiency. In addition, you can remove slow-moving or obsolete stock, which can free up valuable space and reduce inventory carrying costs. Overall, a clean, well-organized warehouse provides for inventory accuracy, enhanced picking speed, and better overall operational performance.

2. Reorder Point & Safety Stock Calculation

In order to avoid running out of stock before new inventory arrives, it is crucial to set strategic reorder points based on lead times and demand variability. To accurately set the threshold for inventory Walmart and other selling platforms that should trigger reorder, businesses need access to information that allows them to analyze supplier performance, historical order patterns, and delivery timelines. When set correctly, reorder points tell you exactly when to restock so you don’t run out of inventory, even if demand suddenly increases or shipments are delayed. This cushion ensures that that fulfillment continues smoothly even when forecasts are off or supply chain disruptions occur.

3. Use Real-Time Inventory Management

Having visibility of your inventory in real-time is crucial to getting a realistic understanding of your actual inventory needs. When you can see exactly how much stock you have at any given time, it’s easier to plan your replenishment order so that you’re not reordering more inventory when you already have sufficient stock or failing to order inventory when you are running low. A quality warehouse management system (WMS) or inventory management system will deliver real-time visibility so you can effectively monitor your inventory levels.

4. Apply FIFO (First In, First Out) Inventory Management

The FIFO—First In, First Out—inventory management method is a widely used approach that ensures the oldest inventory is sold or shipped first, which is essential for maintaining product quality and preventing unnecessary losses. While FIFO is especially important for perishable goods such as chocolate, it can also reduce the risk of obsolescence, damage, or storage inefficiencies for any type of product while improving inventory turnover, minimizing waste, and providing better service to clients. To implement FIFO effectively, it is important to track receiving dates, organize warehouse shelves to prioritize older stock, and ensure your WMS (Warehouse Management System) supports FIFO logic.

5. Use Demand Forecasting

Demand forecasting is important because it allows businesses to plan inventory replenishment orders based on real data. To accurately predict demand (and avoid overstocking or stockouts), use demand forecasting software that allows you to evaluate your store’s sales history, inventory performance, and any current demand trends. This information can also provide insights into where your customers are located and what locations are seeing the most demand for which products. By gathering this information, you will be in a better position to predict demand and allocate inventory where it’s needed.

Let G10 Fulfillment Help with Warehousing & Inventory Management

There are many benefits of outsourcing inventory management. Managing inventory in-house can quickly become overwhelming for growing e-commerce businesses, especially during peak seasons, periods of rapid scaling, or when juggling multiple sales channels. If you’re unable to focus on growth because you’re spending a lot of time troubleshooting storage issues, order delays, or inventory accuracy, it may be time to reevaluate your current setup.

G10 Fulfillment offers flexible, reliable 3PL solutions designed to reduce logistics burdens and keep your operations running smoothly. If you’re dealing with warehouse overflow or stockouts and you’re thinking about outsourcing warehousing and inventory management or your current 3PL is no longer the right fit, G10 is here to help. Contact us today to see how we can get your inventory optimized and support your next phase of growth.