overstockArt.com CEO, David Sasson, posted a new article today on Practical eCommerce titled: Trials and tribulations of inventory management.
The article talks about the reasons why some online retailers hold stock and what are the advantages of holding stock as opposed to trusting your fulfillment with drop-shippers.
In addition, the article tries to give ideas on how to keep inventory levels low to release the ‘strangle hold’ stock has on the company’s cash.
“It is true that if you do not have it you can’t sell it. But more money invested in inventory creates potential problems of less money available for operations… Balancing your inventory for demand is critical to increasing sales. Also, the less inventory a retailer holds while maintaining the same revenues, the higher the return on investment and the greater the growth potential. For many retailers, holding inventory represents their greatest investment, so managing it specifically for your needs is an incredibly critical aspect.”
Read the entire article including a real-world proven algorithm to help in managing stock levels: