Inventory is the cornerstone of any company, so any company should manage its inventory well and avoid excess inventory. Especially since poor inventory management causes waste of resources, which can cost the company more huge additional expenses. When the inventory in the company exceeds a certain limit, this means that excess problems occur, which results in huge problems for the company that we will review in detail in our article. We will also show a set of effective ways to get rid of excess inventory, and deal with it properly while reducing the resulting costs.

What is excess inventory? ‎

Excess inventory is when a company’s inventory contains an excess of what is required, which, if not disposed of promptly, will incur significant costs to the company.

Especially since excess problems, if it remains in warehouses for a long time, can be damaged, and thus lose its value or decrease its value and lose its profits.

What causes excess inventory? ‎

Most of the causes of excess problems are related to poor planning and inventory management or problems related to the sales movement.

And the following is the most prominent of these reasons:

Using outdated methods of inventory management

If you don’t know what inventory is in stock then you are definitely at risk of having a lot of excess inventory that you don’t pay attention to.

Also, manual inventory counting is time consuming and also does not provide accurate data on the status of inventory.

Unlike using automated inventory counting, relying on proper inventory management software. This helps in:

• Setting minimum and optimum inventory levels.
• Making sure that the products your customers need are available.
• Checking that there is no large surplus in stock periodically.

The presence of inaccurate data on the sales movement

The most common cause of excess inventory is the presence of a large amount of goods that users do not have a high demand for.

But inventory management software can help you forecast the demand for your inventory and manage enterprise resources by creating reports on the sale status of products.

As well as identifying the best-selling products in certain periods, which enables you to measure sales of similar products to avoid excess inventory.

Besides the previous reasons, there are a number of other important reasons that may be a major factor in the occurrence of excess problems in retail. Such as:

• Inaccurate sales projections.
• Delivery delays and failures.
• Product returns and canceled orders.
• Negative economic conditions.
• Overpurchasing.
• Volatile consumer demand.

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What are the main disadvantages of excess inventory? ‎

Many companies think that having excess problems is a good thing, but in reality it is quite the opposite.

Excess inventory negatively affects the revenue a company generates, as well as the amount of working capital it has.

Here are a number of points explaining the most important disadvantages of excess problem:

• The occurrence of problems in the company’s cash flow, and this is due to the negative impact of this surplus on the operating capital owned by the company.
• Loss of more revenue resulting from the presence of additional stock that cannot be sold and obtain its profits or its value decreases as a result of its stagnation in warehouses.
• Increase operating costs as a result of this inventory occupying space in warehouses, and companies bear the cost of that space with no return from it.
• Decrease in the value of stagnant inventory in warehouses, as a result of its presence for a long time, and thus its quality deteriorates, which affects profit margins.
• Negatively affecting the company’s financial outlook, due to lack of clarity in the inventory turnover rate.
• Decrease inventory turnover and increased storage costs, which affects the company’s financial position. 

Options for excess inventory management

There are many options that retailers can rely on to better manage excess inventory and reduce the damage caused by it. Here are the most important options that retailers can count on:

1. Sell at a discount

One of the most important options that can help you get rid of excess inventory quickly is to make discounts on those products. This enables companies to:

• Bear the least amount of loss possible.
• Compensate for losses resulting from stagnation of inventory in warehouses as a result of an excess of it.

2. Sell in bulk to discount stores

One way to get rid of excess problems is wholesale, i.e. selling most of the quantity to one party at a discount.

3. Keep in stock and wait for next season

This option is suitable only for commodities that can retain their value over a suitable period of time, so that traders keep that quantity until the next season and then sell it.

4. Using technology to turn over inventory quickly

Due to the current situation and the increasing complexity of supply chains and their disruptions at times, the process of forecasting stock levels and predicting market demand has become more complex.

But the inclusion of technology in inventory management processes can help solve this dilemma, through the use of the latest technology to track inventory.

Thus, stock levels are monitored and future orders are forecasted more accurately, based on available data.

This helps to increase delivery efficiency and reduce delivery costs, thus successfully reducing excess inventory levels.

And LOGSTIAT can provide you with the best inventory management systems that will help you keep accurate inventory tracking.

Thus, determining the appropriate stock levels, and avoiding stock shortages or overstocking, which positively affects your profit margins.

How to eliminate excess inventory

The problem of excess inventory can be solved in the use of modern technology and techniques, such as inventory management systems.

Which will help in managing surplus cases as well as reduce the losses resulting from them, and this means reaping more profits.

Creative discounts can also help counteract this problem, as they encourage consumers to buy large quantities of items.

Thus helping to increase sales and make up for lost profit margins during periods of inventory surpluses.

Many retailers are now using Walmart Fulfillment Services to sell their products as an alternative to Amazon. But in fact, Walmart Fulfillment Services faces a number of challenges that may make it unsuitable for some, but in fact it is on its way to strongly competing with Amazon, especially since its sellers have exceeded 100,000. In this article, we will talk about Walmart Fulfillment Services in some detail, and also present the most important challenges facing it.

What is Walmart Fulfillment Services (WFS)?

Walmart Fulfillment Services (WFS) is a comprehensive fulfillment services for third-party sellers.

Which helps retailers store their inventory within a huge WFS fulfillment network, which has strong distribution centers in the United States.

And with Walmart Fulfillment Services (WFS), when customers place an order on the site, the WFS team will pick, package, and ship the orders on behalf of the seller.

It also includes answering all customer inquiries by providing customer support services around the clock.

What’s special about Walmart Fulfillment Services (WFS) is that they offer free returns on any orders shipped through them.

Walmart fulfillment challenges

Walmart Fulfillment Services (WFS) faces many challenges, and this is evident in the poor ratings it received compared to Amazon services.

Especially since a lot of customers complained about the poor shipping service of WFS, as the fulfillment and delivery of orders would take a lot of time.

Also, some product returns need to pay an additional fee, despite the returns services provided by WFS.

In addition to these challenges, there are a host of other challenges that stand in the way of Walmart Fulfillment Services. Such as:

• No multi-channel fulfillment services.
• Unavailability of international shipping services.
• Difficulty with product requirements Walmart sets for acceptance of products.

Benefits of Walmart fulfillment

Despite the negative customer experience after using Walmart Fulfillment Services, there are plenty of retailers who have taken advantage of its services.

And one of the most important benefits of Walmart Fulfillment Services is that retailers can enjoy a buy-in fund on Walmart at a much higher margin than on Amazon.

Here are some of the most important benefits that you can benefit from in exchange for the services provided by the Walmart platform:

• Free shipping for two days within the different states of America.
• Easily ship your inventory to Walmart fulfillment centers.
• Ship all orders to your customers on time.
• Improve product visibility and conversion rates, which will help boost your sales.
• Provide the best customer service and handle complaints and customer issues on your behalf.
• Provide support to sellers to grow their business.

Leveraging WFS as part of an Omnichannel Approach

Omnichannel is the omnichannel approach to retail, which provides consumers with seamless experiences while shopping online.

Omnichannel enables customer retention and acquisition by delivering consistent messaging across all systems and sales channels.

Walmart Fulfillment Services has built omnichannel capabilities into its services.

With the introduction of the Free & Easy Returns program, which enables customers to return items purchased through it easily and for free as well.

This means Walmart provides a streamlined and intuitive experience for customers, helping online store owners reach a broader audience and improve engagement with them.

How to Increase Fulfillment with WFS

There are several practices that can help you get the most out of Walmart Fulfillment Services.

As well as getting better search rankings on Walmart, here’s how you can benefit from and enhance fulfillment with Walmart Fulfillment Services:

• Competitive pricing application.
• Achieving greater shipment rate on time.
• Improved description of displayed items.
• Obtain and maintain positive ratings and reviews.

So until now, despite the challenges facing Walmart Fulfillment Services, this platform has succeeded in achieving great achievements in a short time.

It strives to provide a better shopping experience for customers, and remains the competitor in the way of Amazon.

E-commerce retailers rely on order accuracy as one of the primary metrics that show the level of trust between a brand and its customers. Improving the accuracy of the order can help provide many huge benefits, including reducing costs and enhancing customer satisfaction, which in return means increasing the profits that the organization achieves. In this article, we will cover all the details about the accuracy of the request, how you interpret it in your business, and the importance of following up on its indicators.

What is order accuracy?

We can define order accuracy as the percentage of orders that are fulfilled and delivered to customers without any errors.

The higher of this rate, the better indicator of the success of your brand and services in fulfilling customer requests.

How to calculate order accuracy

As for the method used in calculating order accuracy, there is a mathematical formula that is relied upon to determine that percentage.

Which helps you to know the level of your brand and business, and it can help you to improve your mistakes and boost your business.

The following is the mathematical formula used to calculate order accuracy, which you can rely on to easily calculate that percentage in your business:

• Order accuracy rate = (total orders fulfilled accurately ÷ total orders fulfilled)*100

What bad order accuracy can do to a business

It is of great importance to maintain a good rate of order accuracy, which will greatly enhance customer satisfaction.

Good order accuracy helps you retain your customers in the long term, which means continuous sales and profit flow.

Especially since if customers receive their order incorrectly, this will lead to an increase in customer complaints and a bad impression on them.

This is because of the bad experience that happened to them, which will make those customers go to another store that competes with you.

The following are the most important points that show you the result of bad order accuracy on your business:

• Creating negative customer perceptions.
• Increase costs to your company.
• Direction of customers to deal with your competitors’ merchants.
• Decreased profits for your company.
• Loss of a large percentage of customers who deal with you.

Track these fulfillment KPIs to improve order accuracy

There are a set of KPIs that can help you improve your order accuracy. The following are the most important of these indicators:

Average order value

What is meant by it is the average of what each customer spends in your online store on orders that he buys from you during a certain period of time.

It is an important performance measure that contributes to improving order accuracy, as it shows the company whether it needs marketing campaigns or not.

This indicator also helps companies predict the products customers need, thus giving the company an opportunity to provide them at the right time.

Inventory turnover

One of the key performance indicators that helps you improve order accuracy is by which you can determine the rate at which your inventory is being used.

The higher this indicator, the more this indicates that there is a strong demand for the products it offers, and vice versa.

Average shipping time

One of the most important performance indicators affecting the improvement of order accuracy is the average time required to complete a delivery within a given period.

This indicator helps you effectively track the effectiveness of your supply chain, and know whether you are facing delivery problems or not.

Return rate

It is the percentage of requests that customers returned after the purchase process, which is most likely due to the system’s inaccuracy in fulfilling those requests from the beginning.

This indicator helps improve returns management to increase customer satisfaction and retain customers instead of losing them altogether.

Another important indicator that also affects the accuracy of orders is the number of times your shipments contain the correct goods and materials.

It indicates how accurate the selection of applications is, and knowledge of this indicator will help you in:

• Handling errors in applications.
• Making appropriate decisions to enhance the accuracy of selection.

The Shopify platform is a global platform through which you can open an online store in a few minutes. Shopify order fulfillment options help you to clearly enhance the fulfillment of your customers’ orders, which has made many online store owners rely on them. That contributes to facilitating the electronic selling process and achieving distinct revenues, in addition to reaching the largest number of users, and in this article we will focus on talking about shopify order fulfillment and its importance.

What is Shopify order fulfillment?

What is meant by shopify order fulfillment is that process through which customer orders are fully fulfilled, from picking orders to shipping them to the customer.

Shopify order fulfillment services also help accommodate the reverse order fulfillment process, by processing return requests from customers.

Especially since Shopify has the modern tools through which you can:

• Returns tracking.
• Send recharge stickers.
• Restocking of returned goods.
• Submit refunds to the original method of payment.

The importance of Shopify order fulfillment

Shopify order fulfillment services have greatly helped online store owners, and enhanced the process of fulfilling their customers’ orders.

Which made most of the owners of online stores use shopify order fulfillment services. And the following are a number of points that explain the importance of these services:

1. Enhance inventory flow process

Shopify order fulfillment helps to improve the movement of products in their inventory better, during all stages of order fulfillment.

Shopify tools provide great visibility into inventory flow stages, such as SKU stocking, which enhance customer order fulfillment.

2. Increase customer satisfaction

One of the most important advantages of shopify order fulfillment is its great role in enhancing customer satisfaction by fulfilling their orders in the best possible way.

Which helps to strengthen and maintain the relationship between customers and your online store, and this will reflect positively on your sales and revenues.

3. Enhance revenue stream

Where shopify order fulfillment services work to submit orders quickly, in a way that ensures that customer requests are met.

Which helps you to keep those customers and boost the revenue generated, as well as compete with other stores strongly.

4. Multichannel fulfillment

Shopify order fulfillment can help you keep up with your online store’s multiple order fulfillment sources with ease.

This is because it provides you with the best strategies to avoid out-of-stock and over-selling cases. Which reflects positively on customer satisfaction and sales

How does Shopify fulfillment work?

As for the mechanism by which Shopify fulfillment works, it takes three forms, and you can choose what suits your business. Here are the formats in which Shopify fulfillment works:

1. Automatic order fulfillment

Through which automatic methods are used to implement customer requests, this is the most appropriate form for e-commerce companies that sell digital products.

It is also suitable for e-commerce companies that use third-party fulfillment service for all product offerings.

2. Manual order fulfillment

The second form of Shopify fulfillment, in which orders are fulfilled manually, is suitable for companies that provide products to customers on demand.

Or those that offer a partial fulfillment option, which gives them more control over orders and inventory management.

3. Partial order fulfillment

It is the last form of Shopify fulfillment, through which part of orders are fulfilled by manual methods.

It is useful for companies that allow customers to place pre-orders on products that are not yet available, and for which automatic fulfillment cannot be enabled.

3 Shopify order fulfillment service options

There are many options provided by Shopify order fulfillment services, and you can choose among them what suits you according to the nature of your business. Here are the most important options available to you:

1. Self-fulfillment

This fulfillment option allows you to choose to fulfill the items yourself, as well as decide how and where to store your inventory thus ensuring that each shipment is in the best possible condition.

This option requires you to partner with an Order Management System (OMS), through which you will get the best support for your business.

It will also help you manage orders and prevent out-of-stock situations by reordering your items to check availability at the time you order them.

2. Outsourcing to a 3PL

The second option, which is outsourced to a third-party logistics service provider (3PL), and through which you will be able to simplify workflow and automate inventory processes.

This will ensure that you increase the accuracy of the execution of your requests, as well as obtain the lowest prices for shipping services, which will contribute to improving your profitability clearly.

3. Dropshipping

Through which you can handle order fulfillment through your supplier or manufacturer.

Through this option, orders are executed through the manufacturer, which fulfills orders through the end customer without any intermediaries.

7 factors to consider when choosing a Shopify order fulfillment service

Before you make up your mind to use Shopify order fulfillment services, there are a few things you should keep in mind.

Which would affect your business and the methods of implementation used, and the following are the most important of these:

1. Omnichannel fulfillment

Omnichannel fulfillment services have become very influential in the sales process, which has given online stores a unique opportunity to adapt to changing demands.

Which makes Omnichannel fulfillment not just a marginal add-on option, but a great necessity to meet changing customer and market requirements.

2. Warehousing software

No matter which Shopify order fulfillment option you use, you should consider Warehousing software.

Which would particularly affect the success or failure of fulfilling orders, so be sure to integrate a warehouse management system to control and monitor operations.

3. Shipping speed

Shipping policy greatly affects customer satisfaction, especially since they always expect a short delivery period when dealing with any online store.

Therefore, you will need to review the shipping options well, in order to ensure that customers receive their orders on time.

4. Multiple fulfillment methods

Using multiple fulfillment methods can help increase sales and keep customers satisfied at the same time.

This is by ensuring more inventory is kept on hand and also automating order processing which contributes to reducing shipping times to a minimum.

5. Customization

If you work with various products that need to customize the packaging process, you should pay special attention to this.

This is so that there is no delay in the delivery of orders, as well as ensuring the provision of appropriate customized packaging options that suit customer needs.

6. Partner integration

You must integrate with the right partner for you to ensure better results in your business. Mergers can benefit you in better fulfilling demands.

These operations will provide you with e-commerce technology solutions, which will enable you to grow your business in a sustainable manner.

7. Order fulfillment cost

Collaborating with the right 3PL companies can help you reduce your costs in fulfilling customer orders.

Especially since 3PL companies have enough experience to deal with fulfilling orders appropriately, as well as providing many shipping options, which helps you reduce costs.

The SKU rationalization process plays a big role in tracking inventory movement automatically, and many companies rely on it to quickly decide which products to restock. This process mainly helps to increase profits and reduce costs incurred by the company, by periodically evaluating the product line and improving the company’s inventory according to profit rates. In this article, we will provide you with all the details about the SKU rationalization process and its importance, as well as how you can benefit from it in your business.

What is a stock keeping unit (SKU)?

Before we start talking about the SKU rationalization process, we will first need to know what a stock keeping unit (SKU) is.

It is an inventory management system that generates a unique scannable barcode, which is placed on product labels in retail stores.

Which helps companies track inventory of those products as well as sales percentages.

And this is to determine the profits they make for incorporating this product into the items they sell, and determine whether they continue to provide it or not.

The stock keeping unit (SKU) consists of a set of letters and numbers, through which qualities and information about the product itself are identified. where it specifies:

• Manufacture company.
• Trade mark.
• Color.
• Size.
• Class.

And other important information and specifications about the product itself. This code usually consists of 6-18 letters or numbers.

What is SKU rationalization?

As for the SKU rationalization process, it is the process by which items are evaluated that the company needs to add or remove from its inventory.

The final decision on that process depends on the profitability of the product itself as well as the percentage of demand for it.

And despite that there are a number of reasons why some companies keep stocks of less profitable items.

For the SKU rationalization process to be successful, the right data must be provided, along with the right time to make the right decisions.

Also, the person involved in making decisions resulting from the SKU rationalization process should have a deep understanding of the strengths and weaknesses of the company itself.

Benefits of SKU rationalization

The benefits of the SKU rationalization process are numerous, especially since it is an inventory management technique that effectively contributes to improving profitability.

So companies that use the SKU rationalization process are always sure that they are going in the right direction and making the right decisions.

It helps focus on inventory needs, thus contributing to business prosperity and profitability.

Below are a number of points that highlight the main benefits of the SKU rationalization process:

1. Reduction of inventory holding costs

One of the most important benefits of the SKU rationalization process is that it reduces your inventory maintenance costs, because it reduces unnecessary inventory.

This avoids the expenses associated with holding inventory for a long time, as well as the costs of inventory obsolescence or loss.

2. Reduce human errors

Inventory and related data such as pricing and inventory counting are appropriately managed through this process.

Which helps prevent all human errors related to wrong choice or misshipping.

3. Improve warehouse management process flow

SKU rationalization process helps in further streamlining warehouse operations, thus improving inventory and goods flow process.

This contributes to maintaining goods in an orderly manner in warehouses, and this improves operations in warehouses in general.

4. Determine the priority of some products

A stock keeping unit system helps to determine the sales volume of different products, as there are certain types of colors or sizes that are more popular than others.​

5. Increase corporate profitability

One of the most important benefits of this process is its great role in maximizing corporate profits.

Because it helps them make appropriate decisions about the products they deal with.

The SKU rationalization process guides companies to learn consumer trends, thereby stocking products that buyers want more of.

6. Understanding products and their movements

The stock keeping unit enables an efficient understanding of products and their movements.

As it makes all concerned parties aware of the amount of stock and product information.

7. Strengthening the organization of warehouses

Through this process, companies will retain products that are in constant demand.

Thus reducing the amount of inventory you have and the costs associated with it.

As well as making your warehouses more organized, and thus easier to manage and handle their operations.

4 steps to implement an SKU rationalization process

There are a set of basic steps that you will need to follow in order to be able to implement the SKU rationalization process in your business. Here are the most important of those steps:

1. Determine your target market

The first step in implementing the SKU rationalization process is to identify your target market before you begin analyzing any data.

And that can be done by answering several questions, such as:

• Who is the target group of the audience?
• What are the needs of the target audience?
• What types of audience are you interested in?

Then try to put together a strong list to review the products you offer them, so that you can choose the products that suit your target audience.

2. Perform a detailed SKU analysis

The second step you need is to conduct a detailed SKU analysis, by monitoring your sales data over a specific period.

After considering the costs of your inventory itself, you will have a good idea of which SKUs will bring you the highest real returns.

3. Check for other variables that could affect your results

After completing the SKU analysis as indicated, in this step you will need to consider other factors that can affect the profitability results of your SKU.

Examining the activities of your competitors can also help you know which products will generate more sales for you and attract customers to you.

4. Organize your product catalogs

In the final step of applying the SKU rationalization process to your business, you will need to collect and organize your SKUs well

This is done by placing them in different categories while sorting, which makes it easier for you to review them on the go and thus avoid mistakes.

And be sure to review the results well after you have finished organizing your product catalogs, to see their impact on your costs and profits as well.

Work in process inventory is one of the most important terms in supply chain management, which greatly affects a company’s financial reporting. Through it, the costs of incomplete products are clarified, so it is included in the components of the inventory account in the balance sheet, and most companies seek to try to reduce the value of work in process inventory due to the great difficulty in estimating the percentage of ending the original inventory. In this article, we will provide you with all the details about work in the inventory process, how it is calculated and its impact on your supply chain.

What is work in process inventory?

Work in process inventory is an inventory that includes incomplete products. Or the products those have been completed but partially and still need to continue working on them in order to become finished products.

That is, work in process inventory reflects the products that are involved in the manufacturing or production process, but have not been completed or produced to be a final product ready for distribution and sale.

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The Importance of work in process inventory

The importance of work in process inventory is that it has a significant and direct impact on the balance sheet of any company, especially those that sell customized products.

Whereas, through the accurate calculations of the WIP Inventory, the company will be able to obtain the value or cost of materials and production for their fulfillment process.

Thus having the ability to determine how to divide the cost, and how to calculate the costs at the end of the accounting period.

This helps different companies keep accurate records about their total manufacturing costs, which they will consider when selling their finished goods to customers or retailers.

This is very important and necessary in business management, so companies focus on determining the value of WIP Inventory primarily within their accounts.

We also find that most companies seek to try to reduce the value of work-in-process inventory because of the great difficulty in estimating the percentage of ending inventory origin.

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Calculating work in process inventory

There is a reliable mathematical formula for calculating work in the inventory process, by which companies can determine the cost of unfinished goods. The formula for calculating work-in-process inventory is as follows:

• Work in process inventory = Total Cost of Manufacturing + Beginning Work-in Process Inventory – Ending Work in Process Inventory.

Many companies have difficulty knowing the Cost of Manufacturing directly, but there is a mathematical formula used in calculating the Cost of Manufacturing directly as follows:

• Cost of Manufacturing = Beginning work-in-process Inventory + Ending work in process inventory + Cost of Manufactured Goods.

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Understanding Work-in-Process Inventory for Your Supply Chain

You need to have a thorough understanding of work in process inventory and be able to identify and calculate it, because it is fundamentally important in your supply chain business.

Determining the value of a WIP inventory helps you detect gaps and weaknesses in your supply chain.

It also gives you a real opportunity to identify unnecessary costs and the strength of your suppliers, thus optimizing the value of this inventory and improving your supply chain as a whole.