Skip to main content

When you sell items that have an expiration date and you have too many of them you will need to deeply discount the price in order to get them out the door before that expiration date passes. In order to make some money on those items, instead of having to take a loss, a business owner may be forced to sell those items at cost. When that happens the business owner has made no profit on the item and has had to pay for the transportation and storage of the item as well as the actual cost of the item. That’s a bad deal no matter how you look at it.

The best way to prevent this from happening is to make sure that your business doesn’t buy too much perishable merchandise. But if you are still using an old manual inventory management system you will probably get stuck with a lot of merchandise that you can’t sell for a profit because of the inaccuracies that manual management systems are prone to. Delayed reporting, manual counts, and other problems make old fashioned inventory systems time consuming and labor intensive, which adds to your cost and leaves you with extra inventory that you have to sell.

How Automated Inventory Management Helps Avoid Hidden Costs of Lost Profit

Making the switch to an automated inventory management system is the best thing you can do to prevent having to drop prices on perishable items to sell them before they expire. Automated inventory management systems update in real-time so you can see at a glance how many orders have gone out, how many still need to be filled, and how much of that perishable product is going out the door. When you have a better idea of what’s selling and what isn’t you can order more precisely and order in smaller quantities so that you have all the quantity that you need to keep customers happy.

This applies to non-perishable items also if you usually buy in bulk quantities. In order to avoid overstocking your warehouse, you need to have to an accurate picture of what customers are buying. If you don’t have good metrics for the products that are popular, you might overbuy a product that doesn’t have a high demand and be stuck with more inventory than you can sell. You might need to deeply discount those items to get rid of them so that you don’t have to store them, and that will hurt your bottom line.

Using a modern inventory management system is the key to making sure that you don’t lose profit and end up paying to store products that you don’t need and that customers don’t want. With accurate sales data, real-time updating, and other features that come with automated management systems, you can track the items that are selling and in what quantities they sell so that you don’t make a mistake when you’re ordering products. The tracking data can also help you plan ahead for high volume sales times, like the holiday shopping season, to ensure that you do have inventory during those high demand times but aren’t carrying a lot of products that aren’t selling other times of the year.

Automated Inventory Management System for Macola and SAP Business One

Ready to get started with an automated inventory management system? WiSys Agility solutions have been designed to achieve efficient Warehouse Management, Supply Chain Management and Inventory Management. Contact us to learn more.