Comprehensive analysis of cross-border e-commerce and overseas inventory management
In modern logistics and cross-border e-commerce operations, inventory management is a key concept, covering the effective management of commodity quantities. Excessive inventory not only takes up funds, but also increases the interest burden; conversely, too low inventory may lead to outages, affecting sales and reputation. Therefore, mastering effective inventory management strategies is crucial to the long-term development of your business.
Basic concepts of overseas inventory management
Inventory management refers to the process of predicting, planning, and executing inventory replenishment activities, and controlling these activities. During this process, the focus is on determining how to order, how much to order, and when to order. An efficient inventory management system not only supports production planning and control, but also provides a basis for cost accounting by promptly reflecting warehousing and flow conditions. Inventory management also enables quality traceability by tracking batch numbers to ensure the reliability of product quality.
In the international market, companies face different inventory cycles. For example, the inventory cycle of some American companies is only 8 days, while the inventory cycle of some Chinese companies is as long as 51 days. This difference directly affects logistics costs. China’s logistics management costs account for 14% of the total costs, which is much higher than the 3.8% in the United States.
Characteristics of cross-border e-commerce inventory
In the field of cross-border e-commerce, inventory can be understood as raw materials, finished products and other materials accumulated in various warehouses during the operation process. Cross-border e-commerce companies have various types of inventories, and manufacturing companies need to hold raw materials and Spare parts, while commercial circulation enterprises mainly hold low-value consumables for sales and management. Not only does this help reduce the risk of stock-outs, it also prevents significant increases in inventory costs.
For cross-border e-commerce sellers, especially in the U.S. market, starting in 2018, they have clearly felt increased pressure on inventory turnover. Due to intensified market competition, some old sellers have experienced slow sales, leading to a backlog of inventory. As warehousing costs rise, fast turnover of goods becomes increasingly important.
The difference between inventory management and warehouse management
Although inventory management and warehouse management are closely related, there are significant differences in the objects and functions they manage. Warehouse management mainly focuses on warehouse layout, material transportation and storage automation, while inventory management pays more attention to the dynamics of all materials in the enterprise, including raw materials, parts and finished products. The main function of inventory management is to establish a buffer zone between supply and demand, thereby balancing the contradiction between user demand and enterprise production capacity, procurement demand and supply chain.
In the current information- and network-oriented business environment, effective inventory management has become a key component of the success of enterprises, helping them to remain invincible in the fierce market competition.