Inventory is like eating, too much or too little is useless. Overseas warehouse stocking tests the company’s own judgment on the market and sales experience. It is often difficult to control inventory levels. Whether it is slow-moving or out-of-stock, it is very detrimental to the seller itself. Many export cross-border e-commerce companies used to adopt a buy-now-sell-now model with very little inventory, which resulted in the habit of neglecting inventory management.
But when a company uses overseas warehouses or its sales scale increases, it will find problems such as returns, stocking, inaccurate inventory, and overage inventory, resulting in a large amount of capital occupation. Inventory is a profit black hole for the retail industry and e-commerce, and has even become a mountain that crushes enterprises. For example, Vanke Clothing, the inventory backlog caused a serious break in the capital chain. Inventory turnover, sales, gross profit, and capital chains are essentially related. Efficient inventory turnover can lead to better capital utilization.
For example, the seasonal variability of bulk goods is very high, and the cost of capital is very high, so sellers of bulk goods generally would rather run out of stock than occupy inventory. Overseas warehouse inventory management includes functions such as inventory counting, reconciliation, batch tracking, inventory allocation, replenishment, and removal from shelves. For sellers, the focus is on inventory accuracy, slow sales and out-of-stock operational results, such as replenishment. If the inventory is insufficient or reaches a critical value, overseas warehouses can automatically replenish goods from the storage area, but if there is a shortage of inventory, stock must be prepared domestically. Reissue.
For the “inventory” amount on financial statements, accounting usually only considers the occupation of funds corresponding to the inventory value, and does not consider the interest payment of the funds. The income from capital turnover = inventory amount x gross profit margin, which can be said to be one of the hidden costs. big.
Inventory data is real-time and is divided into types such as procurement in transit, shipment in transit, inventory in storage, frozen, etc. It must be classified and aggregated, paying special attention to the monitoring of “saleable inventory”. Inventory cycle is an important indicator to measure the health of product sales, that is, the time required to sell a unit of inventory. Understand the relevant benchmark indicators of the industry, and regularly count the unsaleable rate.
Inventory means taking inventory. Through counting, weighing and reconciliation, etc., we check the quantity and quality of the actual inventory in the warehouse, find out the reasons for inventory profit and loss, and discover overdue or damaged inventory. Inventory discrepancies are mostly caused by errors in “receiving, placing, and shipping”. Overseas warehouses must check and adjust accounts in a timely manner to avoid overdue goods causing bad debts and causing disputes over compensation between the two parties.
The more SKUs there are, the greater the inventory management challenge. You can use the ABC classification control method to find out the “critical few” through analysis, and determine the appropriate management methods to focus on the key points and get twice the result with half the effort. Generally, Category A inventory has a high value and does not occupy much inventory space and SKU. Category C accounts for a small proportion of the relative value but a large quantity. By compressing the total inventory, the occupied funds are released, the inventory structure is rationalized, and good goods are not left in stock and bad goods are left in stock. The ABC method is also applied to the picking layout in the warehouse. A small number of best-selling products are put on shelves closer to the packaging table to reduce the walking distance for picking.
To maintain sales continuity, healthy inventory requires timely replenishment, but blind replenishment is also a cause of inventory backlog, and the best-selling cycle is short-lived. There are two common replenishment models. One is the economic order quantity, which determines the order based on the principle of minimum payment per unit product; the other is the reorder point, which uses appropriate “safety stock” to buffer due to the uncertainty of demand or sales cycle. or compensate for uncertainty.
Safety stock is only a reference and should not become a dogmatic restriction for actual operations. Online sales are highly volatile and have poor predictability. Deviations in market judgment must be adjusted in a timely manner and must not be rigidly adhered to a certain inventory optimization model. , the models are all based on relatively mature market models and assumptions. Ideal inventory is based on demand forecasting, and by simulating a point in time in the future of the product, stock preparation, price reduction, returns and other processes can be carried out in advance.
But this is also the most difficult. No matter how much sales data is available, it can only present facts and trends. Under the interference of monthly average prices, market demand regression and other models, decision-making is not easy. It is said that JD.com can achieve 28-day intelligent prediction, ensure product volume and purchase limit rate, and automatically allocate and replenish goods. FBA inventory forecasts are relatively vague, and restrictions on the number of boxes, sizes, and weights may affect timely replenishment.
To summarize, inventory management is a top skill in the supply chain. Cross-border e-commerce must achieve two basic points. First, if a popular product sells a lot, it cannot run out of stock, and an inventory warning value must be set; The second is dynamic replenishment. We conduct inventory analysis and replenishment cycle analysis based on sales conditions to ensure the most reasonable value of inventory. There is no eternal best-selling product, so you must carefully judge whether you still want to fight.