Did you know, keeping your inventory in several locations across the globe, as opposed to just one, can spell out enormous benefits for your online business? Splitting up your inventory is a great way to keep your goods and merchandise closer to your consumers.
So, what exactly is split inventory?
Split inventory is a collective strategy used to make the most of storage space and keep the products nearer to customers. Essentially, several locations are used to store goods so that orders are delivered faster to their end destination and at a much cheaper rate.
In a progressively saturated market, having an upper hand in delivery timelines helps in keeping your e-commerce store a step ahead of others, thus driving revenue and building customer loyalty. Since order fulfilment is at the heart of consumer experience, order delivery forms a significant part of that experience.
What are the factors you need to consider for split inventory?
- Demography
The most important reason behind distributing inventory is to enable accessibility to customers. And since swift shipping and delivery timelines make your retail store more prominent to customers, your first basic step should be to analyse the order history. By spotting the demography from where most of the sales are generated can drive more revenue. As a matter of fact, not many E-commerce shipping companies are locally targeted. Hence, merchandises that are not tied to a certain region qualify as great candidates for inventory splitting.
- Cost saving
The shipment’s journey plays a critical role when it comes to shipping costs. And the distant the shipment’s destination is from the origin, the more costly it is to ship. If your inventory is closer to the destination country, your overall shipping rates will be automatically cheaper.
Plus, if you are looking to reduce your shipping cost, it might be in your best interest to distribute your inventory when shipping heavier products. And, if you’ve received a bulk order volume, the possibilities are that distributing your inventory can secure you little savings. By storing your goods in different facilities, you will save that extra cost required in moving your goods to a distant delivery destination.
- Lesser risks
Natural disasters are often the reason why shipping carriers face delays in delivering goods on time. And since unforeseen catastrophes are likely to impact some of the orders at some point in time, splitting the inventory across different regions will help you lower risks. It will also help you create a backup inventory in further locations to prevent postponements or lost stock.
- Inventory management proficiencies
Inform your present fulfillment partner that you are considering dividing the inventory to see if they have the capabilities. To guarantee that the system fits their requirements, they should request software demos. So, instead of having an off-the-shelf system that may not match your business goals and cause logistical constraints, look for a logistics provider who offers customisable software. Once that’s done, analyse your 3PLs methods to manage the inventory across diverse locations.
So, should you distribute your inventory?
As your business continues to grow, it becomes increasingly important to understand the challenges and requirements of your logistics team. So, by tracking the shipping costs through previous purchases and sales volume by their geographic location, companies will be able to better decide what’s best for their company.
Splitting your inventory can help you save your money and also ensure that your consumers’ expectations are met, thereby facilitating super-quick delivery.