When you’re trying to determine your optimal order quantities, you need to know the average demand for your products. As we mentioned last week, when you’re trying to reduce the possibility of dead stock, you need to know when products are “dying” so you can start eliminating them from your inventory.
But how do you figure out the average demand for your products, or which SKUs haven’t sold in months? Do you go by feel, or do you flip through all your past sales orders? Marking out what’s hot and what’s not can leave you frustrated as you look through piles of sales orders and spreadsheets.
That’s when it’s time to start looking for inventory management software that offers business intelligence reports. With intelligence reports at your fingertips, you’ll know a few important things.
1. Your Best-selling Product
In all honesty, you probably don’t need intelligence reports to know what your best-selling product is.
But if you sell seasonal products, you want to know when demand for these items peak. You also want to get your forecasts right to ensure you’ll have the right amount of products to match customer demand at all times. After all, backordering doesn’t work with seasonal products. By the time a new shipment arrives, the season’s probably over.
Also, like we mentioned last week, intelligence reports can also let you know what your lowest performing products are. And once you’ve identified your “dying” stock, you can take measures to get rid of these as soon as possible
2. Sales According to Channel
As your business grows, you start looking for new opportunities. Thing is, every different sales channel needs different marketing tactics, and you don’t want to be pouring time and effort down the wrong channel.
If one area of your business is moving along smoothly, you can start focusing on building up different parts of your business instead of facing diminishing returns.
However, if a particular sales channel is under-performing, data-driven insights can help you decide whether to re-invest in or divest a sales channel that isn’t performing up to expectations.
3. How to Improve Relationships with Your Customers
With e-commerce, you can sell to people around the world, and intelligence reports shows you where your customers are. Once you know that, you can start ramping up your marketing efforts in that region.
For businesses that sell wholesale, intelligence reports help you understand your customers better. You’ll know their purchase patterns, which lets you offer them amazing customer service.
If a certain customer tends to order a fresh shipment on the first Thursday every month, you can prepare stock for them in advance to minimize their waiting time. On top of that, you can offer them updates on new products that coincide with their order times.
Business intelligence makes your life easier, as you’ll have all the information you need to make business decisions at your fingertips. As seen above, intelligence reports can prove invaluable when you start selling on multiple sales channels.
If you’re wondering about the benefits of multichannel sales, we’ll tell you all about it next week!
Keep in mind that while intelligence reports can provide the information you need to make a business decision, it’s not for accounting purposes. That’s why you need accounting software.