Inventory Management 101


Whether you’re a growing or established, global wholesale distributor, inventory management techniques are critical to your available cash flow, profitability and even customer satisfaction ratings.


Given those impacts to your business, every company should invest the time and resources needed to implement inventory management techniques (most of which go beyond the capabilities of a Google Sheets inventory template).


First and foremost, to implement many of the inventory management techniques we mention here, it’s critical that you have a strong foundation of technology that helps you track inventory KPIs and analyze your inventory. This can be made easier through the use of an automated inventory system.


With that said, let’s dig into some core management techniques that will help you run a smoother, more successful wholesale distribution business.


Inventory Management Techniques


1. Implement Perpetual Inventory Counting

Naturally, ongoing inventory counting is the most obvious place to start. Be sure to count incoming and outgoing shipments daily with the support of software that helps you automatically track it. Perpetual inventory counting also ensures that you maintain inventory numbers in real time, something that your customers will appreciate, and it happens to be required to implement the techniques mentioned below. So, start here right away if you aren’t doing this.


2. Perform Cycle and Annual Counting

To perform a random cycle count, select a limited number of SKUs in your warehouse, count what is physically there and compare it to the counts in the software you’re using to track it. Some companies choose this option versus an annual count, which can take days or weeks depending on the amount of stock on hand, by conducting a cycle count once a month. To perform an annual count, choose a time of year that will be the least disruptive to your business and count your entire physical inventory against what is documented in your system.


3. Set Par Levels for Your Best Sellers

When a given item reaches a predefined minimum threshold in your inventory management system, create an alert to notify that an order needs to be generated for your supplier. Or, better yet, your inventory management system will allow you to create a workflow that alerts you that an order is needed and a purchase order is automatically generated and sent to your supplier. This ensures you are never out of stock of best-selling items.


4. Implement First-In-First Out (FIFO)

First-in-First-Out is exactly what it sounds like. Items that are first-in your warehouse, should be what is shipped out first.  In the event you carry perishables like food or makeup, this helps ensure that items you inventory don’t expire, rendering them unsellable stock.


5. Review Past Sales and Implement Forecasting

Once you’ve been in business for a year, that’s a good time to take a look at sales in the year prior to look for any patterns that indicate a seasonal rush.  You’ll also be able to make more educated buys in the future and save money by buying more upfront based on sales history. You can also factor in your sales team’s pipeline, or sales expected to come in, when forecasting.



By using wholesale inventory management software, you’ll free up more cash flow and be better prepared for seasonal rushes. If you’d like to learn how Systum can help you track your inventory, fill out the form below. We’ll be happy to show you the many ways our platform can make inventory management a breeze.


Categories: Inventory Management

Tags: inventory, stock, inventory software, inventory management

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Hope Davo

VP of Marketing at Systum, Hope is responsible for marketing, communications and branding. When she’s not building marketing programs, chances are she’s running around after her two kiddos or enjoying an indoor cycle class.

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