Managing the inventory is a key part of every manufacturing business in order to function efficiently. When it comes to manufacturing products, different companies have different approach of looking at it. Some companies tend to stock manufactured products in bulk while some believe in demand-based production. Companies often tend to stock excess inventory eyeing bulk purchasing or assuming shortages in the later stages but there are more disadvantages than advantages in the process. Doing this can often backfire companies, which leads to an increase in selling of outdated stocks.
Revealing 8 reasons why selling outdated stocks won’t impress your customers:
1. Life of the products
Outdated stocks often face the wrath of an expiry date of the product. For example: companies that produce eatables or are into manufacturing food products, cannot afford to exceed the recommended use date of the product since it can cause health issues to the customers if consumed after the expiry date. This leads to the loss of manufactured products and they have to be treated as dump and thrown away.
2. Continuously increasing storage fees and capacity
Holding on to more than what you need, will always lead you to trouble. In this scenario, exceeding the storage facility will call for increase in storage space which indirectly calls for unnecessary investing. To avoid such dilemma, FMCG CRM Software is recommended. CRM software can basically help you manage your inventory better and save you from paying extra rental fees to store unused stock.
3. Risk of stocks going unsold
Excess stocking is a sign of misjudged inventory requirements or high sale expectations. High expectations lead you nowhere, same is for manufacturing industries. Storing large quantity goods and not having them sold will only add on to your troubles, meaning you’ll either have to end up giving it away on huge discounts or have them racked up in your warehouse.
4. Opportunity Costs Attached
Stocking inventory will only add on to your opportunity cost. For example: stocking more inventory will mean investing more on warehouse rent to maximize the storage facilities which will then add on to your storage capacity fees. Instead storing excess goods, one can invest the same amount of money on different sources which will result in better ROI.
5. Negative cost implications
Holding on to excess inventory can often result in negative cost implications. Investing in any type of inventory ties up your company funds which in result prohibits it from being used.
6. Selling on Discounts
When you stock excess inventory and you end up not selling them you have no other option but to sell them out discounted rates to reduce the rate of loss you have to bear.
7. Obsolete stock
Why would people want to buy something that is outdated and not worth their expense? This is one of the most important reasons why you should rethink on your company stocking policy right away.
8. Increasing insurance premiums
With insurance premiums, things are often quite simple for manufacturing companies. The more you store the more you end up spending in insurance as simple as that.
So how do you manage your inventory right in order to avoid the above-mentioned hurdles?
One way to get through these obstacles is to get CRM software right away and manage your inventory according to the market needs. Through Kapture CRM software you can get your hands on some of the best free FMCG CRM tools that will manage and maintain the smooth functioning of your business. So what are you waiting for? Get your inventory manager today, go Kapture them all and lead a competitive, quick and efficient business like never before.