Inventory Metrics that Drive Growth: 5 Vital KPI’s

Below you’ll find the 5 most important inventory Management KPIs, a simple explanation of what they measure, how to calculate them, and how SKULabs can help your team improve these metrics. We know scaling your business can be an exciting journey, but it comes with its fair share of challenges. One key aspect that can make or break your scaling efforts is efficient inventory management.

We have ranked the 5 most important KPIs (Key Performance Indicators) to scaling your business through smart inventory management. Easily implement these metrics to have an immediate impact on your bottom line and help you take your business to the next level! 

KPI # 5: Fill Rate

Measures the percentage of fully filled orders

Calculation Formula:(Number of Orders Filled in Full / Total Number of Orders) * 100

A low fill rate can result in customer dissatisfaction and lost sales opportunities. When customers place orders, they expect timely and complete deliveries. A failure to meet these expectations can lead to order cancellations, potential refunds, and harm to your reputation. Ensuring a high fill rate is essential for retaining customers and maximizing revenue.

SKULabs order fulfillment management simplifies order processing, ensuring high fill rates by efficiently managing inventory availability and order prioritization.

KPI # 4: Carrying Cost of Inventory

Calculates the cost of holding inventory

Calculation Formula:(Average Inventory Value x Carrying Cost Percentage) / 100

High carrying costs can eat into your profits and tie up capital that could be used more effectively elsewhere in your business. These costs, which include storage fees, insurance, and depreciation, can become a significant financial burden. By reducing carrying costs, you can free up capital for investments in growth, innovation, or other strategic initiatives.

SKULabs inventory optimization feature identifies slow-moving items, allowing you to reduce storage costs. By optimizing inventory levels, SKULabs helps lower carrying costs.

KPI # 3: Inventory Accuracy

Measures the accuracy of recorded inventory count

Calculation Formula:(Actual Inventory Count / Recorded Inventory Count) * 100

Inaccurate inventory counts can have significant repercussions. If you think you have more inventory than you actually do, you may not reorder products when needed, leading to stockouts and lost sales. Conversely, overestimating inventory can result in overordering, tying up capital and potentially leading to increased storage costs. These inaccuracies can also affect your financial reporting and tax calculations, impacting your business’s overall financial health and compliance.

SKULabs inventory tracking with barcode scanning ensures precise recording of inventory movements. This feature reduces discrepancies between physical and recorded counts, improving inventory accuracy.

KPI # 2: Stockout Rate

Calculates the percentage of orders with stockouts

Calculation Formula:(Number of Stockouts / Total Number of Orders) * 100

Avoiding stock outs is crucial to maintain customer satisfaction and revenue. It’s especially important for businesses with high demand variability. Stockouts can have a direct impact on your bottom line. When customers can’t find the products they need, they may turn to competitors, resulting in lost sales and potential long-term customer loss. Stockouts can also disrupt your supply chain and lead to expedited shipping costs to fulfill orders, further eroding profitability. Additionally, frequent stockouts can damage your brand’s reputation and customer trust, which is often challenging to rebuild.

SKULabs can help reduce stockouts by sending automated low-stock alerts. These alerts prompt you to replenish inventory before it runs out, ensuring a higher stockout rate.

KPI # 1: Inventory Turnover Rate

Measures how often inventory is sold and replaced

This is often considered the most critical KPI as it directly reflects how efficiently you are using your inventory to generate sales and manage working capital. The inventory turnover rate measures how efficiently you’re utilizing your inventory. 

Calculation Formula: COGS / Average Inventory Value 

A low inventory turnover rate means you’re tying up valuable capital in slow-moving inventory. This can lead to increased holding costs, including storage fees, insurance, and depreciation. Additionally, slow turnover can result in the risk of products becoming obsolete or unsellable, which can cause financial losses. On the other hand, a high turnover rate indicates that you’re selling inventory quickly, optimizing cash flow, and minimizing holding costs. It allows you to allocate resources to other areas of your business and prevents your capital from being tied up unnecessarily.SKULabs can help optimize your inventory turnover rate through demand forecasting. By analyzing historical sales data and demand patterns, SKULabs can recommend optimal reorder quantities, ensuring you maintain the right balance of stock.

Remember that the importance of these KPIs can change over time as your business evolves and faces different challenges. It’s crucial to regularly assess and adjust your focus based on your business’s current priorities and objectives. Additionally, the interplay between these KPIs should be considered when making inventory management decisions.

With the right inventory management strategies and tools in place, you can easily implement and improve your business processes! 

Connect with SKULabs Today

Now is the perfect time to discuss how we can help you get prepared for taking your business to the next level!

Chat with one of our experts today. Schedule a meeting or give us a call at 1800-243-2986 to learn more.

New Year, New Beginnings: Strategies for a Prosperous Start to the New Year

As the festive glitter of the holiday season fades, eCommerce businesses often encounter a notable slump in January. This post-holiday period can be challenging, with consumers typically reducing their spending after splurging in December. However, with astute planning and innovative strategies, this quieter month can be transformed into a period of growth and opportunity. Let’s explore some practical approaches to help your eCommerce venture navigate and thrive in the new year’s onset.

Understanding Post-Holiday Dynamics

January is a unique month for consumer behavior. After the holiday season’s spending spree, many customers tighten their belts, leading to reduced sales for eCommerce stores. Many companies will mistakenly mirror this sentiment by cutting budget and therefore seeing less frequent engagement with their customers. Although this might have been the norm in the past, this is definitely not the right approach! Consider this, you have just spent the top of your budget marketing your Black Friday/Cyber Monday and Christmas campaigns generating a huge influx of new customers, only to let them go in January? This is the time to keep that momentum going to retain and turn them in to loyal repeat customers!

Additionally, it is crucial for businesses to conduct a thorough market analysis, understanding the current economic climate and consumer trends. This understanding helps in tailoring strategies that align with customer needs and market demands. Let’s explore some simple strategies to use in the upcoming season.

Engaging Customer Loyalty Programs

Loyalty programs are invaluable for retaining customers. In January, when new acquisitions may be lower, focus on your existing customer base. Enhance your loyalty programs by offering special rewards or points for purchases made in the new year. Consider exclusive deals or early access to new products for loyal customers, fostering a sense of belonging and appreciation.

New Year Promotions and Campaigns

Launch creative promotional campaigns themed around the new year. This could include special discounts, limited-time offers, or exclusive bundles. Additionally, consider cross-promotion opportunities with complementary brands. This not only broadens your reach but also provides added value to your customers.

Digital Marketing Focus

Digital marketing is your powerhouse in slower months. Use email campaigns to reach out to your customer base with personalized offers. Leverage social media to engage with your audience, perhaps by running contests or sharing user-generated content. Also, invest in targeted ads that reach potential customers based on their recent search history or interests.

Inventory Management and Clearance Sales

The start of the year is an ideal time for inventory assessment. Analyze which products sold well during the holidays and which didn’t. For items that are slow-moving, consider organizing clearance sales. This not only helps in clearing old stock but also attracts price-sensitive customers. Clearance sales can be marketed as “New Year Clear-Outs” to add a seasonal touch.

Leveraging Data Analytics

Data is king in the eCommerce world. Utilize analytics to understand customer behavior, track website traffic, and monitor sales patterns. This data will provide insights into what works and what doesn’t, allowing you to adjust your strategies accordingly. Pay attention to metrics like conversion rates, average order value, and cart abandonment rates.

Enhancing User Experience

A smooth and enjoyable shopping experience is vital for retaining customers. Ensure that your website is user-friendly, with easy navigation and quick load times. As more consumers shop on mobile devices, ensure that your website is mobile-responsive. Also, consider implementing features like live chat support to assist customers in real-time.

Sustainability and Social Responsibility

Increasingly, consumers are gravitating towards brands that demonstrate a commitment to sustainability and social responsibility. Showcase any eco-friendly practices or products your business has adopted. Engage in community projects or collaborations that underscore your brand’s values, resonating with a growing base of conscious consumers.

Taking Advantage of the Momentum

January offers eCommerce businesses a chance to kick off the year with momentum. To achieve this, it’s vital to grasp post-holiday consumer behavior and effectively manage inventory. Engaging customers with loyalty programs is not only an effective, but a tried and tested strategy. Bolster this success by launching new year campaigns, and by prioritizing an enhanced user experience. Additionally, placing an emphasis on sustainability not only aligns with current trends but also demonstrates responsibility. Collectively, these approaches transform challenges into stepping stones for growth and innovation.

As we embrace the new year, it’s time to put these strategies into action. Experiment with these approaches, adapt them to your business model, and watch your eCommerce venture thrive. Let’s make this year a remarkable one for eCommerce!

Connect with SKULabs Today

Now is the perfect time to discuss how we can help you get prepared for the upcoming season!

Chat with one of our experts today. Schedule a meeting or give us a call at 1800-243-2986 to learn more.

Beyond the Box: How SKULabs Enhances Shipping with Flexible Label Printing

Shipping software that includes comprehensive label printing capabilities is an indispensable tool for eCommerce businesses struggling with the complexities of packaging logistics. One such software, SKULabs, stands out for its industry leading features that cater to a range of shipping needs.

Cost-Efficiency and Time Savings

The primary advantage of using shipping software that allows for comparing carrier rates is cost-efficiency. Businesses can quickly evaluate various shipping options and select the most economical one without sacrificing delivery speed. SKULabs’ integration with multiple carriers means you’re always getting the best rate possible for your shipping needs. With their robust shipping rules, the cheapest carrier can be chosen automatically while still accounting for the strict delivery deadlines of your various sales channels such as Amazon. SKULabs takes the stress out of this process for you and completely automates the correct selection, enabling you to focus on more important aspects of your daily operations.

Labeling Precision

Being able to print labels such as ‘Picked Up,’ ‘Ready for Pick Up,’ ‘Local Delivery,’ or ‘Manual Shipment‘ directly from the software streamlines the fulfillment process. Many eCommerce operations have their own couriers or a will call station for customers to come pick up their purchases. Having detailed instructions, right on the packages with the customer name and order number significantly improves the warehouse logistics and ensures the right package gets to the right customer. These labels can help coordinate between the warehouse staff and delivery personnel, reducing errors and improving operational efficiency. SKULabs offers customizable manual fulfillment label options that make it easy to implement a system that works for your business’s unique processes. Check out our video on how to set this up within the software.

Enhanced Tracking and Accountability

Local label options enhance the accountability of the shipping process. With labels indicating specific statuses like ‘Local Delivery,’ businesses can track packages more accurately within the local distribution network. This feature of SKULabs is particularly useful for businesses that handle a significant volume of local deliveries or in-house shipments.

Flexibility and Scalability

For businesses that are growing or have fluctuating shipping volumes, SKULabs’ scalable solution is ideal. It adapts to your business size and volume, ensuring that you can always print whatever labels you need, whether you’re shipping two packages a day or two thousand.

Customer Satisfaction

Improved labeling clarity leads to better customer service. With labels that clearly state the shipment status, customers and vendors can easily understand where their items are in the shipping process. SKULabs helps in creating a transparent and reassuring experience for the end-user.

Integration and Compatibility

SKULabs’ shipping software integrates with a variety of eCommerce platforms and marketplaces, making it a versatile choice for many businesses. Its compatibility with different printers and scanning devices ensures that you can print labels efficiently, regardless of your existing hardware.

Environmental Impact

The ability to print only the necessary labels reduces waste, making SKULabs an environmentally friendly choice. By optimizing label usage, businesses can minimize their carbon footprint, contributing to a more sustainable operation.

The right shipping software can transform your logistics operations, providing cost savings, improved efficiency, and enhanced customer satisfaction. SKULabs stands as a shining example of such software, offering flexibility, integration, and a suite of features that cater to the modern business’s shipping needs, including the valuable ability to print various local labels. Whether you’re a small startup or a large enterprise, SKULabs’ solution is designed to grow with your business, ensuring that your shipping operations are as streamlined and efficient as possible.

Connect with SKULabs Today

Now is the perfect time to discuss how we can help you automate your day to day processes and let you focus on the more important aspects of your business!

Chat with one of our experts today. Schedule a meeting or give us a call at 1800-243-2986 to learn more.

USPS Cracks Down on Voided and Outdated Shipping Labels

In a recent update, the United States Postal Service (USPS) has tightened its policy on countering the misuse of shipping labels, including those that are voided or have expired. This move aims to protect the integrity of the postal system by eliminating fraudulent or counterfeit practices.

Understanding the New Policy

As of now, USPS mandates that all shipping labels must be utilized within 30 days of their purchase date. It is crucial for shippers to adhere strictly to this rule to avoid any operational hiccups. The USPS has made it clear that labels that have been refunded or not used within the 30-day window are considered invalid and should be promptly discarded.

The Risk of Non-Compliance

What’s at stake if you disregard this policy? The consequences are significant. If you attempt to ship with an invalid label, you not only risk losing your package but also any claim to it. USPS has stated that packages with invalid labels will be seized and disposed of without the possibility of filing claims.

Staying Within the Guidelines

To stay compliant with USPS’s latest policy, it is essential to:

  • Monitor the purchase dates of your labels closely.
  • Refrain from using labels that have been refunded or are past the 30-day usage period.
  • Verify the validity of your labels before attaching them to your packages.

Commitment to Excellence

This policy update reflects USPS’s commitment to maintaining a secure and reliable postal service. As a shipper, staying informed and compliant with these regulations is not only beneficial for your operations but also contributes to the overall efficiency and security of the mailing system.

Remember, these updated policies are already in effect, and it is our responsibility to align with them to ensure our parcels reach their destinations without any issues.

Check out our blog on SKULabs’ recent partnership with the USPS and how you can take advantage of their new Ground Advantage rates with us!

Feel free to reach out to us here at SKULabs with any questions and speak with one of our experts today, or give us a call at 1800-243-2986 to learn more.

One SKU to Rule Them All: How SKULabs Streamlines Amazon Inventory by Merging FBA and FBM SKUs

In the world of eCommerce, managing inventory can often be as challenging as it is critical. Retailers who sell across multiple platforms, including Amazon, are familiar with the complexities of tracking stock levels for items that are both Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM). Enter SKULabs, an inventory and order management system that brings a solution to the table: the automatic merging of FBA and FBM SKUs into a unified, organized catalog.

The Challenge of Managing Multiple Fulfillment Methods

Before delving into SKULabs’ solution, it’s important to understand the problem it addresses. Amazon sellers typically have SKUs that are fulfilled in two ways:

  1. FBA (Fulfillment by Amazon): Amazon takes responsibility for storing, picking, packing, and shipping the product. They also handle returns and customer service for these items.
  2. FBM (Fulfillment by Merchant): The seller is in charge of storing their own inventory and taking care of all the logistics related to shipping, returns, and customer service.

Managing two sets of SKUs for the same item can be a logistical nightmare. It can lead to inaccuracies in inventory tracking, inconsistencies in stock levels, and confusion during order fulfillment – all of which can ultimately harm customer satisfaction and the bottom line.

SKULabs’ Epic Solution

SKULabs tackles this issue head-on with its innovative approach to SKU management. Here’s how the magic works:

Automatic Merging of SKUs

Based on ASIN, SKULabs’ system is designed to automatically identify and merge FBA and FBM SKUs for the same product into a single SKU in the SKULabs catalog. This means that even though you may have different fulfillment methods, your inventory is tracked as a single unit. This automation simplifies inventory management dramatically.

One Unified Catalog

By merging FBA and FBM SKUs, SKULabs creates a unified catalog. This has several benefits:

  • Simplified Inventory Management: With a single point of reference for each product, it’s easier to monitor stock levels and predict inventory needs.
  • Efficient Order Processing: When an order comes in, SKULabs knows exactly which fulfillment method to use based on the most efficient option or the one you prefer.
  • Centralized Data Analysis: With merged SKUs, sellers can analyze product performance across all fulfillment methods without having to segment the data manually. This significantly simplifies the reordering process.

Real-Time Synchronization

SKULabs not only merges the SKUs but also ensures that inventory levels are synchronized in real-time. This means that sales from either FBA or FBM will immediately reflect across the system, ensuring that inventory levels are always up to date. With SKULabs, you can sync your stock levels from FBA into a connected virtual warehouse to always retain visibility on stock levels

Streamlined Restocking

When it’s time to restock, SKULabs provides a comprehensive picture of inventory across both fulfillment methods, making it easier to decide how much to reorder and how to allocate between FBA and FBM.

Consistent Customer Experience

By effectively managing inventory, SKULabs helps sellers maintain a consistent customer experience, regardless of the fulfillment method. Customers receive their orders on time, and the risk of overselling or running out of stock is minimized.

Even the Smallest Feature Can Change the Course of the Future.

The integration of FBA and FBM SKU merging by SKULabs represents a significant leap forward for Amazon sellers seeking operational efficiency. By automating what was once a tedious and error-prone process, SKULabs has empowered retailers to focus more on growth and less on the nitty-gritty of inventory management.

For businesses looking to streamline their operations and harness the full potential of their Amazon sales channel, SKULabs offers an elegant solution that turns the complexity of managing multiple SKUs into a strategic advantage. As eCommerce continues to evolve, tools like SKULabs will be invaluable in helping sellers stay organized, focused, and ahead of the competition.

Connect with SKULabs Today

Now is the perfect time to discuss how we can help you automate your day to day processes and let you focus on the more important aspects of your business!

Chat with one of our experts today.Schedule a meeting or give us a call at 1800-243-2986 to learn more.