The Dangers of Stock Mismanagement

Sep 09, 2013


Whether you run an ecommerce business or have physical premises a good understanding of inventory management and keeping your stock levels correct is essential. The problems that arise from not knowing how to organise and even order your stock can be fatal to your business. There are dangers if you have too much and dangers if you have too little and your stock management system needs to guarantee, in every instance possible, that your customers can buy what they want when they want.

Keeping Little or No Stock

There are advantages to this method of stock management. It means you can be efficient and flexible and only have exactly what you need, when you need it. It means your storage costs can be lower and it means you can keep up to date, develop and produce new products without having old stock to offload.

The dangers however come when you’re trying to meet your stock needs and you realise delivery costs and fulfilling your orders becomes expensive and complex. Another risk is the chance you run out of stock if your system fails and orders are placed for things you don’t have. The final danger is that you’re dependent on your supplier’s efficiency and if it’s your personal business is this something you want?

Keeping Lots of Stock

As with the previous stock management method, there are advantages of keeping lots of stock. It makes it easy to manage and managing the stock costs less. You’re also never likely to run out and if you’re stocking other people’s goods you may be able to pick up large discounts for buying in bulk.

The disadvantages of this method include increased storage and insurance costs and the risk that goods may perish whilst they’re not being sold. There’s also the real danger that stock may become obsolete before it’s used and you’ll have much of your business’ capital tied up.

Stock Management Risks

Mismanaging your stock can lead to risks which will affect your entire business. When you have a disorganised stock management system or no system at all it will impact on other areas of business, especially if you’re regularly out of stock, and in the long-term you risk losing customers and rendering your own business obsolete. Your business and customers deserve access to your full product range so you need a stock system that works or you need to find an innovative partner who can support your business.

If stock management is a real concern for you then working with an order fulfilment company can make all the difference. Your fulfilment company should be able to help you with every element of your stock management and remove the need for you to build a system of your own. They may provide storage facilities like us or they may also specialise in quick turnaround products.

If you struggle with stock management don’t let it drag your company down. Find a professional order fulfilment partner who can remove this stressful element from your business and allow you to focus on the areas which you excel in.

Category: News

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