What is the purpose of holding inventory? To be responsive to consumer demand.
The faster you can fulfill orders that come in, the more positive an experience your customers will have and the more likely they’ll return in the future and tell their friends to buy from you. Having products on the shelves and in your warehouses ensures your customers have instant access to the products they’re looking for.
Holding inventory isn’t the only business model that works. Could drop shipping be a better option for you? Under that setup you don’t have to hold as much inventory in a warehouse, but simply tell your vendor(s) to ship specific items directly to your customers. This is an important model for you to consider.
Drop shipping certainly isn’t for every business because it adds an extra layer between you and your customers, but it can save money on warehouse space and carrying costs.
Robert Lockard is a copywriter with Fishbowl. He writes for several blogs about inventory management, manufacturing, QuickBooks, and small business. Fishbowl is the #1-requested manufacturing and warehouse management software for QuickBooks users. Robert enjoys running, reading, writing, spending time with his wife and children, and watching movies.