Stock turnover, stock turn, and inventory turns are all other ways to describe inventory turnover. It’s the movement of stock over a certain period of time that is calculated by dividing the cost of goods sold by the average inventory. When inventory is not being sold it is incurring storage costs and is also not bringing in any income.
The inventory turnover ratio measures the performance of your business and your products. These insights can be used to prevent financial issues arising while increasing profitability.
High turnover indicates a positive business flow, whereas lower turnover indicates that there could be some issues that need to be examined. So, how do you optimise inventory turnover to deliver the best for your business?
Optimise Supply Chain Processing
Streamlining your supply chain can help reduce the kinks, delays, and costs so as to improve profitability and delivery. Optimise your factory or warehouse space to complement your fastest moving inventory. Inventory with the fastest turnover rate should be placed in the most favourable position for easy access and quick movement. Products with lower turnover rate can be moved further back to ensure that movement and flow is as effective as possible where it needs to be.
Evaluate Product Pricing To Improve Inventory Turnover
Review your business pricing strategy to ensure that you’re offering the best possible prices for optimal inventory turnover and profitability. Dropping prices in an attempt to garner more sales can sometimes have the opposite intended effect. People expect to pay more for premium quality and offering these products at a reduced cost can be an indication of lower quality, even when it’s not.
Explore wholesale pricing strategies to ensure you’re offering the best value for your products, while also having enough room for profit.
Focus On Best-Selling Products
Your best-selling products should get more of your focus in order to move as much inventory as possible. Review inventory reports to ascertain which products experience heightened inventory turnover and which are at the opposite end of the spectrum. Remove the lowest performing inventory to improve the overall inventory turnover for your entire business.
Eliminate Excess Or Obsolete Inventory
For slow moving or obsolete stock, there is an alternative solution. Upload and sell your overstock, slow moving stock, superseded and obsolete items online. Not only will you be able to clear the stock, but you can also prevent complete financial loss on those products.
Industrial Clearance offers you a unique marketplace whereby your obsolete products can still be moved at a nominal cost. Customers will have access to the most competitive prices available for these products, and you’ll have a clear line of sale that won’t impede with the rest of your inventory.
We engage in a strict vetting process before taking on any stock, which means that we only work with quality suppliers. This in turn attracts quality buyers, ensuring that you’ll get your money’s worth for stock that would otherwise be classified as redundant.
Sign up for an account today and get going on clearing your obsolete stock and optimising inventory turnover.