How do you set your inventory: based on customer satisfaction or profitability?

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There is a difference between efficient storage policies and storage policies based on customer satisfaction.

From the point of view of profitability, some SKUs with a lower demand and that are less likely to move should not be in the inventory. They may not be profitable enough to justify their presence in the deposit from a financial perspective. However, if they allow you to respond to customer requirements and build a loyalty relationship, what do you do to keep them?

Some things to consider:

Transport costs versus products in stock

There is always a debate between the two options – do you have bigger transport costs or products in stock with less demand? When you have products in stock, you can respond faster to customers’ requests and prevent them from going to other suppliers. When you do not have them, you can increase both shipping costs for special orders and there is the risk that another provider responds much faster to the request and loses the sale. Here is what has to be measured and checked which is the most advantageous and cost-effective option.

Customer loyalty

Inventory based on client request allows you to reduce execution time. Storing the right products at the right level of stock from a customer-based perspective allows you to offer them “now” and helps you differentiate yourself from other suppliers who can not do so. The speed with which you respond to orders makes the client casual to a loyal one.

Price advantage

When you have the necessary inventory to cover the demand, you have the advantage of being able to adjust the price in order to have the best profit margin, but also to respond quickly to the customer’s request and to loyalty it.

FluxVision WMS is a key component for efficient warehouse management and inventory optimization. This warehouse management solution manages all operations, from receiving to delivery. Our solution transforms all warehouse operations into simple, intuitive and paperless activities, based on barcode identification.

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