(i) Calculate the average daily sales volume based on historical sales
First, query the sales data for at least the past month, and count the order volume of “recent 7 days”, “recent 15 days”, “recent 1 month” and “recent 3 months” respectively, and calculate the average daily sales volume data by weight. Each company usually calculates the sales volume in different time spans according to the weight ratio based on different considerations of the product categories, sales regions and holiday characteristics it operates.
(ii) Calculate the total demand based on the average daily sales
Many cross-border sellers often mistakenly believe that “average daily sales” is “total demand”. When calculating the total demand, it is necessary to take into account factors such as the time from stocking to warehousing and listing, and the expected number of days for the product to be sold.
Total demand = (purchase cycle + warehouse turnover cycle + logistics cycle + safety inventory days + purchase interval days) x average daily sales (iii) Understand the actual available inventory
After calculating the total demand for the product, the next step is to understand the actual available inventory.
Total available inventory = planned in transit + purchase in transit + first leg to be dispatched + logistics in transit + inventory quantity – unsent order quantity – safety inventory quantity (IV) Recommended replenishment quantity
The recommended replenishment quantity is the difference between the total demand and the total available inventory.
Recommended replenishment quantity = total demand – total available inventory
-[(purchase cycle + warehouse turnover cycle + logistics cycle + safety inventory days + purchase interval days) x average daily sales]-(planned in transit + purchase in transit + first leg to be dispatched + logistics in transit + inventory quantity – unsent order quantity – safety inventory quantity)Starting from the analysis start date, add the purchase cycle, logistics cycle and safety inventory days to get the demand date for product replenishment.
Through the above 4 steps, it can be seen that the replenishment business scenario is related to the management model of the entire cross-border outbound chain. Therefore, many novice cross-border e-commerce sellers who directly manage inventory through the store backend often encounter situations where the estimate is inaccurate, the out-of-stock reminder is not received in time, and the replenishment is too late. This is because the backend data lacks comprehensive consideration of many third-party factors. At the same time, for mature sellers with multiple platforms, multiple accounts, multiple SKUs, multiple warehouses, and multiple logistics methods, the difficulty of data collection, real-time synchronization, and calculation and prediction will increase exponentially.
Therefore, cross-border e-commerce sellers can only improve the timeliness and accuracy of replenishment by choosing the enterprise resource planning (ERP) software that suits them and setting algorithms according to their actual needs.