How To Minimize Inventory Overstocks

When it comes to business, inventory control is one of the most important aspects. You can have a great product or service, but if you don’t have the necessary supplies to sell them, you may be in trouble. Let’s say your business sells clothing: You don’t just need enough of each style and size in stock so that customers don’t leave empty-handed. You also need some extra pieces for those who want to purchase multiple items.

Many companies find themselves with too much inventory sitting around their warehouses or storage facilities. This is either because they ordered too much from their suppliers or because they overestimated how quickly their products would sell out at retail stores. This is where systems like just in time inventory management come into play. This article will highlight a few methods to ovoid overstocking.

How To Minimize Inventory Overstocks

  • Run A Perpetual Inventory System

Perpetual inventory refers to a system that tracks inventory levels in real time. It’s a critical tool for inventory management, which can help you identify overstocks and understocks, track when to restock your inventory, and ensure that you’re running at optimal efficiency.

Here’s how It works: You set up your perpetual inventory with an automated data feed (like an API or a spreadsheet file) that sends updates about every transaction at your store. The data feed tells the system when to increase or decrease an item’s quantity by one unit. This allows you to see all of this information on a screen as it happens in real time. As a result, you get to keep tabs on what’s happening at any given moment so that nothing slips through the cracks.

  • Streamline Your Reordering Process

If you’re not already using a software system that automatically orders when inventory levels are low, then it’s time to start looking into one. This can help you save money by ensuring that you don’t overstock and waste money on unnecessary storage costs or shipping due to last-minute orders.

If you’re ordering from a vendor, use a single vendor for all orders instead of multiple vendors, who may not be aware of each other’s existence. For example, imagine you have five different vendors who don’t share information about their clients. If one of those suppliers happens to sell out because another company places an order first, your entire operation can be slowed down by having to wait for someone else before getting back on track again. Worse, you may have no choice but to pay more.

  • When In Doubt, Order Less

If you are unsure about how many to order, consider under-ordering by a few units. The last thing you want is stock that cannot be sold fast enough because your inventory has increased too quickly.

If you don’t need it, don’t buy it. If there is any doubt in your mind about whether or not something should be ordered, consider not doing it. You will save time and money by avoiding unnecessary overstocks altogether.

Another thing to consider is this: If you don’t use it, don’t order it. You may think every new product will sell like crazy, but that’s not always true. By being careful, you wouldn’t have any excess inventory sitting around later down the road if something turned out to not sell well.

  • Consolidate Your Vendors

Consolidating your vendors can be a great way to reduce costs, increase efficiency, and ensure that you always have the right inventory on hand. In addition to saving time and money in shipping costs, this will also save you money on inventory storage as well as reduce the risk of out-of-stock items.

For example, suppose your company uses multiple suppliers for the same item. In that case, it may make more sense to work with one vendor instead of having several different ones stocking pens in their warehouses. This is especially true if the products are similar enough that they don’t require specialized knowledge or training on how best to store them.

  • Keep Track Of What Sells

Tracking your inventory is a big part of the battle to minimize overstock, so it’s helpful to have a system in place that helps you keep track. A POS (point of sale) system can store information about every item sold, including its quantity and price. You can also use a warehouse management system or a customer relationship management or CRM system to track what products are selling well and which ones aren’t. With these systems, you’ll be able to see which items are more popular than others and adjust your ordering accordingly.

Another method of keeping track of what sells is to use stock-keeping units (SKU). An SKU is a unique identifier that helps the seller keep track of the products he or she has in stock. It’s important to track your SKUs because they let you know what your inventory looks like at any given time. A software system can help you do this by allowing customers to input their SKUs, scan barcodes, and enter them manually.

Good inventory tracking software should also feature thorough reporting so that you can see how many items are left in each category, what are selling best, and which areas need improvement. Some systems even offer tools for forecasting about things like when it’s time to restock. This way, there won’t be any surprises about which products are low on stock or need more attention from buyers.

  • Conduct Periodic Inventories And Audits

The final way to minimize inventory overstocks is to conduct periodic inventories and audits. These are important for several reasons. Most importantly, they can help you identify any problems that may be occurring in your supply chain.

Audits should be conducted by someone other than the person who performs the periodic inventory. This way, they can provide a fresh perspective on your business practices and identify any potential issues that may be contributing to overstocking.


Inventory control systems allow businesses to effortlessly track their inventory in real time. This allows them to keep tabs on their supply levels and avoid overstocking products. Inventory management software makes it easy for you to manage your stock levels and restock products at the right time so that you never run out.

FG Editorial Team
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