What is inventory management and how to improve it for B2B sellers?

For B2B sellers, inventory is often your company's biggest asset.

And if inventory is your biggest asset, you'll need to give some special care and attention to your inventory management.

B2B industries are constantly evolving. And you need to ensure that your processes and operations can keep up. Your inventory management strategies and practices must keep up if you operate in an import or export industry.

Practical inventory management can help make selling simpler – as can selling on Cooig.com.

Read on to learn how to transform your selling methods and grow your business!

What is inventory management?

Inventory management is a mindful way to control and keep your inventory levels prepared for your business.

From sourcing your inventory to storing it, selling it, and re-ordering it, it's a delicate game that can bring your company more success if you manage it correctly.

Understanding your quantities, what's selling, what's coming, and product storage locations is all part of inventory management.

Think about it – controlling your business's biggest asset and analyzing it for improvement makes a lot of sense.

Only 43% of small businesses manage their inventory¹ – less than half!

Detailed inventory management will help your stock levels stay in a perfect range to avoid items going out of stock and having too many products that won't sell. Understocking leads to unhappy customers and overstocking leads to a strain on your resources and liability for your business.

An essential part of inventory management is utilizing software and systems that will help you understand your inventory at a glance.

Now you have a solid understanding of what inventory management is. But let us tell you why it's so important.

Why is inventory management important for B2B sellers?

There are many reasons why inventory management is important for B2B sellers – especially e-commerce B2B sellers. We've identified the top eight.

1. Manage your sales channels

If you sell your B2B products in multiple channels, out of various warehouses and storefronts, things can get disorganized quickly.

Inventory management allows you to optimize your sales channels and have the right stock in the right places. Your inventory systems need to be able to track inventory wherever it may be.

2. Identify inventory errors

Without a watchful eye, you might make the same mistakes over and over again when it comes to inventory.

If you aren't consistently managing your inventory, how do you know if you're bringing in unsuccessful products or losing revenue by selling out of things too quickly? Or, how do you know if your employees are shipping incorrect products?

Inventory management involves finding, understanding, and preventing errors wherever you can.

3. Necessary quantities

Ordering just the right quantities to meet your B2B company's demand is extremely important.

Identifying the sweet spot for product quantities can help you manage your money better and keep your customers happy.

4. Simplify reordering

Without strong awareness of your inventory, how do you know what products to reorder and when?

With a streamlined inventory management system, you can remove any guesswork you're currently doing. And by setting up notifications or timelines, you don't have to hover over your inventory numbers daily.

5. Better money management

Inventory management allows you to maximize your profits without overspending your cash.

In fact, minimizing understocking and overstocking can lower your inventory costs by 10%².

By knowing the ins and outs of your inventory, you'll be able to make better financial decisions when placing orders for products, pricing your items, and factoring in other costs such as storage, shipping, packaging, and more.

6. Better organization

Efficiency is key in B2B businesses, and organization is essential to efficiency.

Having an organized inventory management system will improve the overall functionality of your company.

7. Happy customers

Better inventory management leads to fewer mistakes, fewer ‘out of stock' items, more efficient processes, and more time to spend on customer service.

Increased accuracy and attention to your customers will keep them happy in the long run!

8. Grow your business

Finally, the most important aspect of inventory management is the power that it has to help you grow your B2B business.

All the importance of inventory management we just shared leads to business growth, and that is likely your main priority.

Improve your inventory management and watch your business succeed.

How does inventory management work?

Inventory management is not complex, and there's a simple process to follow.

Inventory management begins when you consider bringing in a product, and strategize and estimate its demand.

You identify which product you'd like to manufacture or bring in, but you need to know how much of it you should order.

You'll need to analyze sales trends, your warehouse space, previous goods sold, market research, and more.

Once you've done your fair share of research, you'll place your order for your B2B products. At this time, you'll need to start utilizing your inventory management software and systems.

Tracking incoming products is just as important as tracking products you currently have in your warehouse. And, so is tracking their arrival date, variants, and quantities.

Once you receive your inventory, you'll need to update your software and systems to reflect your in-stock quantity. Then, you'll need to set up your sales processes and warehouse storage to keep your inventory amounts synchronized.

Once your products are stored and ready to sell, you'll need to track their fulfillment locations, sales, shipments, and returns. Tracking all of these steps helps you efficiently manage your inventory.

Finally, once you track your inventory throughout your pipelines, you'll have plenty of data to analyze when you reorder.

Inventory management techniques

There are a few well-known inventory management techniques, but knowing which one is best for you will depend on your business. We've identified the top three.

Just in time

Just in Time inventory management can be tricky, but works well for small businesses with limited cash on hand.

This inventory management technique details ordering and receiving your products just before they need to be shipped. This technique is also ideal for businesses with limited storage or warehouse space.

When you have minimal inventory on hand and order it as soon as a customer makes a sale, you reduce the risk associated with storage and pre-ordering high stock levels that tie up your cash flow.

ABC analysis

ABC Analysis is an inventory management technique that allows for closer looks at your products and the value they can offer your business.

By identifying which products have the highest value or the highest consumption, you can give them special attention and resources.

There is a belief that 80% of a business's inventory consumption comes from only 20% of a business's total items.

The ABC Analysis method allows you to examine your products for what they're worth and determine which deserves the most attention when it comes to selling them.

Cycle counts

Cycle Counts involve dividing your products into smaller categories so that you can focus your attention on certain products at a time.

When doing inventory management and counting your inventory periodically, it helps to have a strategic and systemic approach.

Sorting your products into groups will make inventory counts simpler and more organized. With more organized inventory counts, you'll have fewer errors and mistakes.

Once you've completed your cycle counts, you can examine your inventory and make educated decisions regarding reordering and inventory levels.

Tips for managing your inventory

We've shared what inventory management is, why it's important, how it works, and some main techniques. So to wrap everything up, we have some tips to share to help you manage your inventory for B2B e-commerce.

Make a plan

When it comes to inventory, sometimes it's hard to avoid surpluses and overstock. The best way to manage these is to have a plan set in advance.

Understand your sales channels and sales seasons, and identify other ways to sell stock that you can't get rid of. This will help free up warehouse space and recoup your losses.

It's also important to make plans for circumstances beyond your control. Supply chain issues, ordering errors, and discontinued products can all affect the satisfaction of your customers.

So plan ahead, and find ways to get in front of these issues before they become a major problem.

Set up par levels

A par level is a minimum quantity you want for each product you have in stock. For example, you know that you never want to have less than five of a certain item on hand.

Then, you'll need to set up notifications or reminders to reorder this product once you get close to five in stock.

Par levels are also a great way to set priorities for reordering products for your B2B business.

Hold safety stock

If you're wary of overselling during a busy season, try holding safety stock within your warehouse or inventory storage.

Safety stock allows you to have a backup plan if your inventory levels get too low during a busy period.

However, safety stock can be tricky as it's a fine balance between overstocking and overselling.

Find software and systems

There's no one-size-fits-all when it comes to inventory management software. What works for one business might not work for another. It's all about finding what's best for you.

Some companies find success with spreadsheets. Others prefer to invest in powerful software.

Try out a few solutions before making a decision and understand how technology can help you with your inventory management.

Sell on Cooig.com

If you're ready to improve your company's inventory management to start growing your business, you should also consider selling your products on Cooig.com.

Cooig.com is a major online wholesale website where thousands of B2B import and export businesses can attract new customers.

With five simple steps, you can open a seller account and reach new audiences instantly:

1. Open your seller account
2. Post your B2B products
3. Create your storefront
4. Connect with potential, active, and returning customers
5. Make some sales and watch your business grow

Plus, Cooig.com has many helpful resources to help your business and your inventory management.

Open a seller account today to pair a new channel with your new inventory management, and watch your business succeed.