Why do you need to secure the inventory?
Securing inventory is essential for you to do to prevent overselling of products. Product overselling potential will always be present in your business, especially if many stores are spread across various sales channels.
However, this risk can be prevented and controlled if you understand how, and if overselling occurs, you will be faster in handling it. This is because these risks have been mitigated from the start.
What is Overselling?
An overselling event may have happened to you, namely when receiving orders that exceeded the existing quantity. As a result, the stock of goods that had run out and reached zero turned into a minus.
Of course, overselling will not be a hassle if you have a fast supply chain, so you can quickly cover soaring demands.
However, it will be a different story if you wait for the goods to be produced first or sent from the supplier. If you experience this, your store’s reputation will be at stake. If that happens, overselling could impact sales as well.
If this situation often occurs, it impacts the consumer experience, resulting in declining sales figures. Of course, you don’t want this to happen, do you?
After all, it is better to prevent with some strategy beforehand. Therefore, you need to know in advance some ways to cause product overselling and how to overcome them using the inventory security feature.
Cause Overselling Happens
The overselling incident that you have experienced could be due to several situations, to prevent this from happening again, you need to know the condition that caused it. So if you are faced with the same situation again, you can take steps to prevent it.
But you need to understand one thing, the risk of overselling the product will still exist. Now you can develop a strategy for securing stock to prevent the risk of overselling as small as possible. So, you will reduce the risk of overselling. The following conditions usually trigger overselling:
- Best-selling products
The products that sell the most or have high sales figures are included in the category of fast-moving products. This means that the average daily orders can reach thousands per day. This is not a problem if you only sell in one marketplace.
But the story will be different if you sell it on various marketplaces. There will be a risk of overlapping incoming orders while only one stock data is used. As a result, the product stock allocation was invaded from various channels.
This condition will cause you not to know the actual state and amount of stock. In addition, there are also moments where less than ten units of items are left, but several orders come in simultaneously.
- New Product Launch
Newly launched products also have the potential to experience overselling. When your marketing is successful, the demand for the product explodes. Of course, that is a good thing.
But it can lead to overselling. When you have launched the product in the marketplace, enthusiastic buyers immediately invade the product if, the stock you provide is less than the incoming order, then overselling would happen.
The product is also sold in many sales channels, which can cause the risk of overlapping the same orders. Incoming orders will scramble to find your product.
- Not Backing Up Stock
Stock that is free or not reserved can also make product overselling happen. This can occur when the existing stock is insufficient and overwhelming incoming orders.
So, stock reserves do not only function to conduct campaigns or flash sale marketplaces. But it also serves to secure stock when orders increase at certain moments.
For example, at the moment of Eid, of course, the orders for prayer mats will increase rapidly. Well, it will cause overselling to occur.
How to prevent it?
To prevent and overcome overselling, you need to do several things. It would be best if you did these preventive actions to minimize the possibility of overselling. Although it does not guarantee one hundred percent, the prevention can reduce the number of incoming overselling orders.
Let’s look at some tips to prevent overselling:
- Priority Store
Priority Stores make you only display stock at certain stores. This feature will automatically work when the supply of a product has passed the set lower limit.
Of course, you can choose the store you want to prioritize—for example, the store with the most sales.
This method avoids simultaneous transactions exceeding the product’s stock, thus minimizing the risk of overselling.
- Reserved Stock
You must be familiar with reserve stocks. Apart from being used for promos or flash sales in the marketplace, the spared stock also serves to secure your inventory when supply is decreasing or there is a shortage.
You need to pay more attention to details when conducting campaigns in the marketplace. Usually, you will sell this reserve stock during the campaign period to prevent it from exceeding the promos quota.
In addition, other sales channels with no campaign activity will display the final available stock.
Remember the formula below:
Available = On Hand – On Order – Reserved
- Depleting Stock
The depleting stock feature will provide a notification when the stock of a product has passed the set lower limit. So you can restock faster before the product out-of-stock.
In addition to those three preventive ways that can be done, you can also plan inventory more deeply to organize inventory management better.
You can find out the buying behavior of each product. As well as predicting the incoming and outbound of goods by analyzing the sales reports and inventory reports.
With better inventory management, it is hoped that you can prevent the risk of overselling. So that it can improve customers’ shopping experience at your shops.
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