Category: Inventory
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Retail Arbitrage with AliExpress, Shopify, DSers
New and seasoned sellers can expand a product line and turn a profit by reselling items from other retailers. Retail arbitrage is as old as ecommerce itself. The term describes purchasing a product at a brick-and-mortar store and then selling it on Amazon, eBay, or a branded ecommerce site. The drop-shipped version includes buying from…
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Poor Marketing Kills Ecommerce Dropshipping
Dropshipping is a good way to source products without much investment. Unfortunately, this seemingly turn-key model has little barrier to entry and thus attracts many competitors with razor-thin margins and no clear way to differentiate. Yet creating a successful dropshipping business is not impossible, provided the would-be entrepreneur understands the growth and profit challenges. Dropshipping…
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Charts: U.S. Wholesale Trends Q1 2024
The U.S. Census Bureau gathers monthly data on sales and inventories from domestic wholesale firms. The “Monthly Wholesale Trade” survey includes B2B merchants, distributors, exporters, and importers but excludes manufacturers, refiners, and miners selling their own products. According to the Census Bureau, the survey “offers business leaders and policymakers a current assessment of the nation’s…
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Charts: Investment Trends in Operations Q1 2024
Most U.S. operations and supply chain officers say technology investments haven’t delivered the expected results. That’s according to PwC’s 2024 “Digital Trends in Operations Survey.” PwC, the accounting and consulting firm, surveyed 600 operations and supply chain executives in the U.S. in January and February 2024 across consumer markets, energy, utilities, mining, health services, pharmaceuticals,…
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4-5-4 Calendar Aids Retail Planning
Since the 1930s, retailers have used the 4-5-4 fiscal calendar to streamline and improve forecasting. This somewhat peculiar planning method could help modern retailers and direct-to-consumer brands. Ending the year on the same weekday simplifies comparisons across timeframes, aiding in strategic decision-making. Here’s how. 4-5-4 Calendar The 4-5-4 retail calendar is a scheduling framework that…
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New FBA Tool Points to Future of Inventory Management
Fulfillment by Amazon announced this month a new low-inventory-level fee and, separately, an AI tool to help merchants avoid that fee. The announcements offer a glimpse of what’s coming for retail inventory management. Low-inventory Fee FBA’s low-inventory-level fee takes effect on April 1, 2024. The fee affects “standard-sized products with consistently low inventory levels relative…
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JoshsFrogs.com Growing Leaps and Bounds
An entire business focused on pet frogs may be the ultimate long-tail venture. Josh Williard’s company, JoshsFrogs.com, breeds and sells frogs and the products that support them. Founded in 2007, Josh’s Frogs has scaled to 90 employees across two Michigan-based facilities. “We’ve been growing by leaps and bounds,” he told me, seemingly in frog-speak. Selling…
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Mixed Success for Private Label Brands
Lower-priced private-label brands have long been a mainstay of large U.S. grocery chains and even more popular over the past two years owing to large increases in food prices. As a result, U.S. grocery store brand sales in 2022 rose 11.3%, almost double the growth of national brands, according to the Private Label Manufacturer’s Association….
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Rising Costs Prompt New Return Policies
Merchants have struggled with online purchase returns for years. But the issue has escalated in the past 12 months as the volume and processing cost of returns increased dramatically, resulting in many merchants large and small overhauling their policies. Returnless Refunds The problem is magnified by returnless refunds, which many large companies have implemented. Letting…
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T-shirt Seller on Licensing, Drop-shipping, More
The first step in selling t-shirts imprinted with pop-culture items is obtaining permission from rights holders. Kevin Stecko has been doing that since 2000 when he launched 80sTees.com, his t-shirt business. But receiving that permission is not easy. He told me, “I started the company with impressions of He-Man, a toy cartoon. I obtained that…
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Can Fast Fashion Ever Be Sustainable?
What you wear is not just a fashion statement; clothes and accessories declare your outlook on the environment. Yet most people are unaware of apparel’s devastating impact on the climate. The industry is responsible for 4.0% to 8.6% of the world’s global greenhouse gas footprint — greater than the footprints of France, Germany, and the…
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Disclosure Rules for Alcohol, Cannabis Sales
Online retailers know about regulations and notices, such as privacy, warranties, and more. But no amount of laws and disclaimers compares to the requirements of selling alcohol and legal marijuana. “I’m not sure that there are specific legal disclaimers. It’s more [about compliance], wherein online sellers need to comply with alcohol and cannabis laws regarding…
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The 5 R’s of Merchandising (for Ecommerce)
A 100-year-old merchandising concept applies to modern-day ecommerce retailers — the right people, right product, right quantity, right price, right time. The post The 5 R’s of Merchandising (for Ecommerce) appeared first on Practical Ecommerce.
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3 Flaws of Cost-plus Pricing
Cost-plus is a popular retail pricing strategy. It preserves a margin and is easy to use, even for businesses with thousands of SKUs. Cost-plus works as its name implies. A merchant determines the all-in cost of selling a product — sourcing, warehousing, marketing — and then adds a markup. Cost + Markup = Price The…
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Is Selling Marijuana and Alcohol Online Worth It?
Want to sell laptops over the internet in the U.S.? It doesn’t make much legal difference whether the buyers are in or out of state. The same holds for almost everything in ecommerce. The taxes may differ, but that’s about it. But when it comes to marijuana and alcohol, the differences are mind-boggling and complicated….
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Is Online Marijuana the Next Big Thing?
Some retail observers claim legal marijuana is the next big thing. Constellation Brands, a global beverage alcohol company, has dumped best-selling wine brands and invested billions in cannabis in the U.S. and Canada. Meanwhile, 39 states and the District of Columbia have legalized either recreational or medical marijuana amid almost constant attempts in Congress to…
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5 Tips for after-Christmas Promotions
For retail ecommerce marketers, the time to think about an after-holiday sales event is before the season’s peak. Having a plan can encourage sales during a traditionally slow month, preserve margin, and free up cash. Typically, an online merchant won’t know per-item sales until after the peak Christmas season — but it is possible to…
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Alcohol Selling Online Is Complicated
Online wine sales increased dramatically during the pandemic. And several state legislatures are working on laws that would make it easier to purchase spirits online. The demand is there, which could mean online alcohol sales are about to skyrocket, and savvy web retailers could take advantage of growing consumer enthusiasm. All it takes is a…
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Stagnant Sales Are Creating an Inventory Glut
Global retail volatility has been rampant over the past 18 months. During 2021 and the first quarter of 2022 strong consumer demand was impeded by limited inventory due to supply chain problems. Then discretionary purchasing stalled as inflation took a toll on consumers. Now, as the supply chain issues resolve, retailers are holding large inventories…
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Charts: Global Manufacturing Outlook 2022
In mid-2021, KPMG International surveyed 146 CEOs of large manufacturing companies in Europe, North America, and Asia-Pacific to learn what’s on their minds for 2022. The ensuing report, “Global Manufacturing Prospects 2022,” addressed the CEOs’ views on supply chain resiliency, new technologies, and matters involving the environment, society, and governance. More than two-thirds of CEOs…
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Supply Chain Bottlenecks from the Trenches
Since 2006 I’ve managed inventory supply chains of ecommerce businesses. My current employer, Lighting Reimagined, is a U.S.-based B2C and B2B provider of home decor items. We partner with manufacturers globally to bring our customers the best products at the best prices. The pandemic has crippled global supply chains. Inventory delays persist despite the relative…
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Supply Chain Problems Upend the Global Economy
Nothing highlighted the United States’ reliance on foreign manufactured goods more than the Covid-19 pandemic. China makes about half of the global supply of protective masks. But it stopped exporting them in the first quarter of 2020 to maintain its domestic supply. At that time, there were almost no mask manufacturers in the U.S. Today…
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Getting Investors to Buy Your Inventory
When it comes to funding inventory, retail businesses can be creative, using loans, credit cards, supplier terms, and even advances from family. Whatever the method, however, raising the money can be a challenge. “Every business needs to fund inventory before it gets the opportunity to earn revenue by selling it, and there is no single…
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Save Money on Inventory with EOQ
A production scheduling model first proposed in 1913 and popularized in the late 1980s may help modern companies understand how much inventory to buy and how often, saving money in the process. Ford Whitman Harris, an American production engineer, developed the economic order quantity (EOQ) model to help buyers at manufacturing companies understand how much…
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The Increasing Complexity of Product Returns
The pandemic sparked an increase in ecommerce sales, but it also generated a massive rise in product returns. According to U.S. Department of Commerce estimates, total ecommerce sales for 2020 were $788 billion, an increase of 32.4 percent from 2019. But the number of ecommerce packages that were returned in the U.S. in 2020 jumped…
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How to Calculate and Interpret Inventory Turnover
How quickly a business sells its inventory is typically a strong indicator of efficiency, cash flow, and general well-being. Imagine two online retailers selling products for home gardeners. Both companies hold about $1 million in inventory on average. But one company turns its inventory 10 times each year and the other only five times. The…
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The Keys to Lower Inventory Costs
Managing inventory is among the most critical tasks of an ecommerce company. Poorly managed, inventory costs can escalate, and profits erode. In this post, I’ll review five tactics of high-performing, multichannel sellers that greatly lower inventory costs while streamlining operations. The Keys to Lower Inventory Costs Build an accurate sales forecast. Do not buy inventory…
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3 Inventory KPIs to Drive Ecommerce Profits
Basic inventory management involves tracking quantities by channel, location, and return rates. Key performance indicators, however, are far more critical for driving profits. In this post, I’ll address three essential inventory KPIs: turnover, carrying costs, and opportunity costs. Inventory Turnover Inventory turnover is the cost of goods sold divided by the average inventory by period….
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12 Ways to Lower Inventory Costs
Offering pre-orders is a good way to test product demand without having to purchase the inventory. This example is from an online fashion marketplace. U.S. retailers are reportedly sitting on about $1.43 in inventory for every $1 of sales. Decreasing inventory costs should therefore be a priority for all merchants. In my experience, there are…
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My first big inventory mistake
I’ll never forget my first big inventory mistake. It occurred in 2006. I was working for LivingDirect, an online appliance retailer. I thought for sure I would get fired. LivingDirect sold icemakers, air conditioners, refrigerators, and similar appliances. I thought for sure I would get fired. I’d been sourcing appliances for about a year and…