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5 Reasons Your Company Benefits from Storing Extra Inventory

By | Tarah Mills

Typically, businesses want to meet demand and that’s it. Storing excess inventory can be costly and unnecessary, both of which most businesses seek to avoid. But there are occasions when your company might benefit from storing extra inventory. The following are some advantages of this approach to seriously consider.

1. You Don’t Risk Being Out Of Stock

One of the most compelling reasons to have excess inventory is to avoid alienating customers by being out of stock. In many cases, this is a worse scenario than dealing with the drawbacks of having extra merchandise. When customers come to your business and you don’t have what they want, they will go elsewhere. Even if you can get the items the order will still be delayed and many customers will not want to wait. Keeping items in stock and available is simply one of the basic essentials of running a successful business. If you keep extra stock in your storeroom or in a nearby warehouse you are far less likely to run out and have to face unhappy customers.

2. Suppliers May Experience Disruptions

It is never outside the realm of possibility that suppliers might experience serious disruptions due to a number of reasons. Seasonal demand could be high, there could be raw supply shortages or a supplier may be experiencing a shakeup, affecting every business further down the supply chain. This is a very unfortunate position to be in for your business as you can suddenly lose access to new stock in a situation that is entirely beyond your control. If you have extra inventory on hand, you will not be as beholden to temporary disruptions in the supply chain and be able to distribute product like normal during that time, which could be an incredible advantage.

3. It’s Cheaper To Buy In Bulk

Another reason you might benefit from holding excess inventory is if it is cheaper to buy in bulk from your suppliers. You can then hold this extra inventory in your storeroom, warehouse or a specialty storage solution like White Glove Movers. If you can get your products for a cheaper price, then you will make more profit selling them to your customers. It may permit you to offer deeper discounts to occasionally draw more customers in and better compete with your competitors. This can also save on shipping and distribution costs, as you will need to order less frequently. Cost-saving benefits are one of the biggest advantages of holding extra inventory.

4. Errors Can Occur

Perhaps an employee forgot to order a particular item from your supplier or accidentally ordered far too few. Suppliers can occasionally make quantity errors as well when they fulfill orders or discover they actually do not have the requested item in stock. This leaves you stuck waiting for additional products to arrive or being forced to scramble and order from another supplier. Having extra inventory helps protect you from these occurrences by providing you more time to compensate for them. Your own inventory numbers might also be off, and you may be unaware you are running dangerously low on stock. Although having extra inventory can’t always prevent this, it can make it less likely. Errors are bound to happen at some point with almost certainty, and being prepared to mitigate them is undeniably useful.

5. Unexpected Circumstances

Businesses can use sales numbers from previous years to predict what items will be in high demand and when they will be in demand in most cases. However, there is always a degree of uncertainty. Some unforeseen events, crisis or craze could easily make certain items incredibly desirable, leaving your company in an excellent position to meet demand if you carry extra inventory. This may even give you a serious advantage over your competitors. It is always better to be prepared for possible demand increases than not. It will take a certain amount of business savviness to foresee both short- and long-term market trends for certain products, which is a skill you can learn and develop.

Inventory management is a critically important part of running a business, whether online or out of a brick and mortar store. Using technological inventory management system can help your business manage its safety inventory accurately and effectively. Like every business decision, holding excess inventory has pros and cons, but some of its advantages are undeniably appealing.


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