What Is Inventory Restocking and When Should It Be Used? Ways to Restock, Tips for Successful Stockpiling, and Automation Opportunities

Imagine you operate an online store for high-end roasted coffee. You sell around 3,000 bags of coffee per month on average.

Your order volume suddenly doubles out of the blue. nYou’re scrambling to restock inventory because your most popular coffee flavors are constantly selling out, both in terms of revenue and customer confidence.

A successful plan for replenishing stock to match demand and keep costs low necessitates careful planning.

If you’re having problems keeping track of your inventory, this article will show you how to restock your shelves and minimize waste in the supply chain.

What is inventory restocking?

Restocking inventory is the process of restocking items at the right moment and location in response to demand and anticipated sales. If done correctly, inventory optimization can help you avoid missing out on sales opportunities without overstocking (which leads to higher carrying costs, dead stock, and other inventory problems).

When getting started, you may order a seemingly unplanned number of goods and hope you sell through it. While this technique can work for tiny companies that operate out of their homes, as your business grows you’ll need something more sophisticated.

Restocking inventory is more than simply ordering more goods from a manufacturer and putting it on the shelves. It needs accurate inventory allocation, knowledge of demand, and an understanding of production lead time as well as how long it takes to acquire and store goods in advance for retail fulfillment.

What does inventory restocking consist of?

Restocking inventory is a crucial component of inventory optimization, but it’s difficult when you have no idea what the future holds.

Whether it’s leading up to the holiday shopping season or an influencer promoting your product to their followers, demand can change at any time, making it difficult to forecast.

However, there are approaches to restock product inventory based on what you know at the SKU level. Here’s a summary of what inventory restocking entails.

Knowing when to restock

Knowing when and how often you should restock inventory is critical to optimizing your replenishment cycle. It’s critical to use tools and technology that allow you to track inventory in real time, especially when ecommerce inventory is continuously moving through the supply chain (and there are frequently delays along the route).

There are several inventory apps on the market that may help you forecast consumption based on previous sales trends, allowing you to make a more informed decision about when to reorder at SKU level.

It’s also important to consider how long it takes for different phases of the supply chain—from receiving inventory from your supplier to getting goods on the shelves as quickly as possible.  

Knowing what to restock

Depending on the number of SKUs you have for sale, you may need to go a step further with inventory restocking. Understanding what items are selling faster than others might help you optimize and restock inventory based on customer demand.

If a firm offers numerous SKUs for the same product, you may just test them all. This will assist to lower inventory levels by not keeping the same amount of each item, even if one is a lesser-seller. You could also discover some SKUs that seldom sell and save money by eliminating them.

Implementing strategies to have complete insight into inventory levels can also assist you understand where your products are most popular (particularly if you keep inventory in various locations).

Knowing how to restock

The challenges of restocking goods is made more difficult when you don’t have the help of a team and technology. Restocking inventory isn’t simply about reordering stock; you must also consider your inventory storage and receiving procedures, as well as how quickly you can get inventory ready to sell.

If you’re going to increase, you might want to place a bigger purchase of goods. Do you have enough area? Will you need to relocate or re-rack your warehouse? Making adjustments to warehouse setup may take a long time and require a lot of planning.

How successfully you manage returns has an impact on how quickly inventory restocking is completed. You need to process returns promptly so that you know how many goods were returned and can re-stock the shelves for future sales.