6 smart ways for e-commerce to get a grip on your supply chain and available cash

Retailers know that the last few years have been tough for the industry. With economic volatility at every turn, increased fixed costs and a cost-of-living crisis still knocking the public’s confidence to shop freely. It’s never been more important for businesses to keep cash flow moving.

In this article, you can read more about controlling inventory management within an uncertain supply chain.

Header Visual Blog Inventory Turnover Rate
Having the right amount of inventory is a continued challenge. After the Covid-19 pandemic-fueled spike in sales led to shortages for most retailers, many bought an excess of products to meet what they expected to be continued demand. Only to be faced with an economic downturn in which sales went down, leaving them with a surplus of products they couldn’t shift.

We show you six smart ways to get a grip on your supply chain and avoid that cash getting tied up in excess stock.

market demand

1. Know the market demand

Keeping current market demand in mind is essential when making purchasing decisions. It can be tempting to purchase on instinct, with the danger of purchasing too much or too little.

Always ask yourself: “Do I purchase because I can or because the market demand tells me so?”. Making purchasing decisions based on data gives you more certainty about the volume, costs and delivery times.

low and high purchase

2. Low and high purchase prices

In some purchasing situations, you have to make a trade-off between low and high purchase prices. A container from Asia can contain cheap products but may be a larger investment, which can pressure your margins.

The opportunity to build up inventory during a period with reduced supply can sound tempting, especially if your suppliers offer you a quantity discount. The danger is purchasing too many products and ending up with expensive inventory that is difficult to shift.

transportation costs

3. Reduce transportation costs and increase delivery reliability

One way to save on some of your purchasing costs is to reduce transport costs. Check whether the containers with which your products are shipped are full. Know your carrier and make sure you choose the most efficient mode of transportation.

Are there alternative producers or suppliers closer? By ordering locally, you can make your supply chain more sustainable, reduce the effective time that orders are in transit and increase delivery reliability.

inventory management more effective

4. Make your inventory management more effective

Historical data and forecasts are leading in your purchasing decisions. As a company, you should always strictly manage your inventory and analyse how many products you need to meet customer demand.

Effective inventory management is possible by taking control of your current inventory, having knowledge of market demand and obtaining data on the performance of your suppliers.

inventory costs control

5. Keep your inventory costs low

By purchasing in a targeted and flexible way, you can keep purchasing and inventory costs relatively low. Inventory costs can eat up a significant portion of your company’s cash flow. You would rather spend money that you spend on piling stock on things that directly generate revenue – for example, a marketing campaign.

In addition, the value of the purchased products may decrease and inventory can quickly become obsolete while in storage. The impact of this is sometimes underestimated.

supplier management

6. Improve your supplier management

Better supplier management starts with analysing your inventory – such as through an ABC analysis – and maintaining an accurate database of your suppliers.

Take a critical look at your suppliers because that can make all the difference. For example, you can work with lower inventory values by purchasing products locally and from different suppliers.

Want a comprehensive white paper & extra tips?

Download our free white paper with more in-depth information and extra tips to get a grip on your e-commerce supply chain and cash situation.

Operating flexible and scalable as an e-commerce company

In this article, you have been given tips to deal with supply chain problems.  Optiply allows you to manage your stock more effectively and make analyses through user-friendly software. With smart & data-driven purchasing you achieve:

  • Better product availability, so more turnover
  • Optimal stock management, so more cash flow
  • Purchasing optimisation, so lower purchasing costs
  • Automation of purchasing processes, so more time

Want to learn more about inventory optimisation and demand planning? Check some other resources!


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