Increasing sales while reducing costs

New Member
4 0 0

Increasing sales while reducing costs is really possible with an effective inventory management, trust me.    

Of course, meeting the customer demand is what we want, but we all know that Shopify is not designed to provide a sales and inventory forecasting software solution, so when it does comes to estimate the future needs Shopify has limited capabilities.
At Intuendi we set out to apply Machine Learning, software and advanced modeling analytics to improve the client’s forecasting capabilities. Our software has the ability to optimize the selection of forecasting algorithms by looking at seasonal influences while also taking into account trend-related factors. Then for marketing and sales promotions, we developed a new approach using advanced algorithms, separating demand into base and promotional components, which helped to improve the ability to anticipate likely sales uplift.

Why am I talking about forecasting? 
"All forecasts are wrong, some are useful". Sure, and useful forecasts (made by data scientists, not Excel ninjas :) ) are fundamental for raising the service levels with no need for adding extra budget to the standard investment. 
How? Inventory Optimisation is the key: understanding what products are overstock and don't need for replenishment, quickly ordering products with an insufficient stock level that your customers will ask for. Think about reducing waste you invested in overestimated stock needs, and avoiding lost sales due to unpredicted stockout risks. Now it's easier to believe the title of this discussion is a real possibility, isn't it?

This is our goal with the new app Intuendi: helping businesses with their daily decisions about what, when and how much to reorder for making their customers happy.
I'd love to know your opinion as Shopify users, and I'd be happy to know what do you think about the app. We are customer-driven by design, so your feedback is the most valuable contribution to our project.

Feel free to contact me if you need more info/support/help ... and thanks for reading the post!
 

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Tourist
8 0 1

Thanks for your important tips.

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New Member
4 0 0

Nice to hear that you find my tips valuable. 

What we learnt from our experience is that customers often talk about problems like "we have issues with timely shipping orders, since some products are not available", but this issue hides a bigger issue: those customers have bad service level settings, so they buy products that don't need replenishment at all (and probably are largely overstock) and don't buy products with stockout risk (that cause delays in shipments, since they have to wait in order to have the product in stock). The reason is that when they place the PO, they don't have the information they'd need in order to make the right decision because the traditional inventory management tools don't provide a real optimization.

This is just an example, of course, but the point is that a good inventory optimization can make companies better invest their money, with less lost sales, less overstock, and happy and loyal customers. 

Any contribution to this discussion is appreciated :) 

This is just an example, of course, but the point is that a good inventory optimization can make companies better invest their money, with less lost sales, less overstock and happy and loyal customers. 

Any contribution to this discussion is appreciated :) 

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Shopify Expert
99 0 1

Cool post, great topic.

My $0.02 is, focus your products, unfreeze your assets.

As ecommerce companies grow, they require more inventory in order to fulfill their increasing orders. All things being equal, if you double your sales, you need twice the inventory. The only problem is, inventory costs cash, and small businesses usually don't have a lot of that.

The first strategy is to focus on differentiated products that have high margins, instead of commodity products with low margins. Higher margin products make more money, that extra profit can be reinvested in higher inventory levels.

Another tip is to keep your inventory levels as low as possible, while still maintaining products in stock. The mistake would be for a brand to buy an entire year's worth of inventory or more. This freezes your assets. It ties up cash for a long period of time and also increases the inventory risk if that product does not ultimately sell. Whereas a lower inventory level carries lower risk.

BOTTOM LINE: Don’t jeopardize your entire company by over investing in the wrong assets. Use customer data to manage inventory strategically.

Just wrote a blog about this, if you want more: https://bit.ly/2OhF0Do

Good luck!

Kevin Simonson is the CEO of Metric Digital, a performance marketing agency in New York City that focuses on driving revenue and customers through for ecommerce business via online advertising, email and other digital marketing channels.
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