Inventory is a profit black hole for the retail industry and e-commerce, and even a mountain that crushes companies. Inventory is like eating, too much or too little is useless. Overseas warehouse stocking tests the company’s own judgment of the market and sales experience. The inventory is often difficult to control, and it is not good for sellers whether it is direct sales or out of stock. Many cross-border e-commerce companies used to adopt the model of buying and selling now, with very little inventory, which formed the habit of ignoring inventory management.
However, when companies use overseas warehouses or their sales scale increases, they will find that returns, inaccurate stocking inventory, and overage inventory have caused a lot of capital occupation. Inventory turnover, sales, gross profit, and capital chain are essentially related. Efficient inventory turnover can bring better capital utilization.
Overseas warehouse inventory management includes inventory counting, reconciliation, batch tracking, inventory transfer, replenishment, and delisting. For sellers, they should focus on inventory accuracy, unsalable and out-of-stock situations. If it is found that the storage space is insufficient or reaches the critical value, the overseas warehouse can automatically replenish from the storage area; but if the inventory is short, it must be replenished from the domestic stock.
The inventory amount on the financial statements usually only considers the capital occupation corresponding to the inventory value, without considering the interest payment of the funds. Since the income from capital turnover is equal to the inventory amount x the gross profit margin, it can be seen that the hidden costs are huge.
The inventory data is real-time and is divided into types such as purchase in transit, shipment in transit, inventory in stock, and frozen. It should be classified and totaled, and special attention should be paid to “monitoring of saleable inventory”. The inventory cycle is an important indicator to measure whether the product sales are healthy, that is, the time required for the unit inventory to be sold. It is necessary to understand the relevant benchmark indicators of the industry and regularly count the unsalable rate. Inventory and inventory counting can check the quantity and quality of the actual inventory in the warehouse through counting, weighing, and reconciliation, and can find out the reasons for inventory gains and losses and discover overdue or damaged inventory. Inventory differences are mostly caused by errors in “collection, release, and delivery”. Overseas warehouses should check and balance accounts in time to avoid bad debts caused by overdue goods and cause compensation disputes between the two parties.
The more SKUs there are, the greater the inventory management challenge. The ABC classification control method can be used to assist management. Through analysis, the key few varieties can be found, and the management methods suitable for them can be determined. Grasping the key points can achieve twice the result with half the effort. Usually, Class A inventory has a high value and occupies a small amount of inventory space and SKUs; Class C inventory has a small proportion of value but a large quantity, which can compress the total inventory, release the occupied funds, rationalize the inventory structure, and avoid the situation where good goods are out of stock and bad goods are in stock. The ABC classification control method is also applicable to picking in the warehouse. Goods that are popular but not of many varieties should be put on the shelves in an area close to the packaging table to minimize the walking distance for picking.