Warehouse Inventory Cycle Counting Saves Your Business Time and Money

Apps by Sellercloud, Ecommerce Industry, Skustack

Inventory management is a crucial component of a successful omnichannel e-commerce business. The foundation of any effective inventory strategy is knowing how much stock you have and where it is. With the pace of modern e-commerce retail, this can be challenging. That said, accurate inventory counts are essential when it comes to eliminating overselling, avoiding over-purchasing, and generating actionable business data.

With accurate inventory numbers, you can optimize your multi-channel e-commerce sales and improve overall customer satisfaction. No more apology emails for delayed or seller-cancelled orders. No more emergency rush orders from your suppliers.

The key is to transform the way that you think about inventory. Omnichannel inventory management platforms are great, but they are only as good as the numbers they are working with. At some point, you inevitably need a physical count of your merchandise. Rather than relying solely on an annual inventory audit, cycle counting throughout the year is a more thorough, efficient and cost-effective strategy.

The Problems with Traditional Inventory Counting Methods

Manual inventory audits are an outdated, ineffective practice. To start with, conducting a whole-warehouse hard count requires a business to grind to a halt. All merchandise and supply inventory are frozen while warehouse workers wander up and down the isles with clipboards in hand. Items are counted, quantities are recorded, and all the individual counts are then compiled into a final inventory result.

This all-hands-on-deck approach may be the way that retail inventory has been calculated for generations, but it is long past its practical usefulness as a reliable, standalone solution. Several key reasons include:

  • Manual inventory counts are costly. To ensure an accurate manual inventory count, you need to make sure that your inventory levels remain constant for the duration of the audit – nothing new comes in, nothing gets shipped out. This means that orders are left to pile up and new merchandise is left waiting to be unloaded.

Furthermore, in order to minimize the duration of this disruption, inventory audits typically become an “all-hands-on-deck” affair. This pulls employees from their usual roles and disrupts your day-to-day operations. Not to mention, extra labor hours mean extra costs.

  • Physical inventory audits are tedious. No one likes to do them. The repetition of moving shelf to shelf, bin to bin, counting, and recording quickly becomes a slog. No one will ever mistake inventory counting for a team morale booster. This leads to the final issue…
  • Manual inventory counting is prone to mistakes. The more a process relies on human effort, the more opportunities there are for errors. Inventory counts require accuracy to be useful. Every miscount, misrecording, or miscalculation further devalues the inventory data you collect.

Thankfully, there’s a much more productive and cost-effective alternative.

Cycle Counting: The More Efficient Way to Audit Your Inventory

Rather than relying solely on an annual manual inventory count, many retailers and e-commerce businesses have transitioned to a cycle counting model that makes taking stock of your inventory a continuous process throughout the year.

Not only does this minimize or eliminate many of the issues outlined above, but it also provides some additional benefits:

  • Cycle counting makes it easier to correct inventory errors. When you are focusing attention on your inventory counts more regularly, it becomes easier to spot blunders that otherwise would go unchecked (and cause costly errors) until the next annual audit.
  • Cycle counting can prioritize your high-turnover merchandise. When you eliminate the burden of counting your entire inventory each time you choose to audit your warehouses, it frees you up to focus on maintaining the most up-to-date counts on the products that matter most to your profitability. Slower-moving stock can be relegated to less frequent counting once or twice a year.
  • Cycle counting can free up your warehouse staff. Rather than diverting your entire labor force to a large-scale inventory audit, you can conduct smaller cycle counts throughout the year as part of the regular routine. Not only do you get more up-to-date inventory data more often, but workers are more likely to be auditing inventory they are most accustomed to (which means faster counting and fewer mistakes).
  • Cycle counting makes it easier to optimize and customize your warehouse space. Having updated inventory counts throughout the year means that you can reconfigure warehouse layouts and storage decisions to best match your order processing needs. You can use data-driven decision making to transition high-volume sales merchandise into the most easily accessible areas and relocate slower sellers and seasonal goods to lower-traffic locations.

Many e-commerce businesses that subscribe to a cycle counting inventory model still conduct manual counts annually. In some cases, it is more habitual than a necessity. In other cases, cycle counting procedures still include enough errors to require the annual hard count. Regardless, inventory cycle counting remains an important and relevant practice – particularly in the e-commerce world.

Skustack Makes Continuous Cycle Counting Intuitive, Accessible and Affordable 

Whether you are looking to add regular inventory cycle counting to your inventory routines or you are simply looking for a way to improve your existing cycle counting procedures, Skustack is the answer.

As an industry-leading omnichannel e-commerce platform, Sellercloud is well aware of the challenges and headaches that come with auditing inventory. We are also aware of how important it is to get the numbers right when it comes to generating accurate inventory counts. In designing Skustack – our fully integrated omnichannel WMS platform – we made a point to focus on embedding the inventory cycle counting process into the day-to-day warehouse workflow.

Our patented technology centralizes every aspect of your inventory processing from top to bottom. By trading clipboards for handheld scanners, every member of your warehouse team has the ability to scan, count, and record inventory data quickly and intuitively. As a result, the combination of improved accuracy and time savings will reduce your overhead costs. 

For more on how Skustack can bring optimized inventory cycle counting into your warehouse workflow, contact us directly for a free consultation.

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The Sellercloud team is dedicated to providing you with insights and content that can help guide your business strategy in a meaningful way. With 10+ years in the e-commerce space, our goal is to share our knowledge and ideas with you to help you achieve your business goals.