Product replenishment, in its most basic form, is when retailers receive shipments of specific products on a recurring basis so they can support the demand of said product to customers in retail stores or online.
Product replenishment, in its most basic form, is when retailers receive shipments of specific products on a recurring basis so they can support the demand of said product to customers in retail stores or online. This is a process that occurs in retail and online on a regular basis and with all products available for purchase at any given location. If retailers only had a limited number of products available at any given time, this could lead to “stock-out” where the item completely runs out of stock and customers will not be able to purchase the item. If this happens, especially during a time of high demand for a specific product, the seller can lose a substantial amount of money and lose business.
In order to avoid this issue, many retailers and online shops use an inventory management system that automates product replenish in come capacity, although it is generally quite limited in many cases and will only automate certain portions of the replenishment process. However, often is a company does automate this process in some capacity, certain rules and guidelines are created and when the product is getting low in stock, replenishment is triggered, and a reorder of that product is initiated.
One of the biggest challenges retailers and stores may face if they do not have that part automated by a special system, is knowing when it is time to reorder a certain product. If you have an automated system this tends to be much easier to determine and the system will know when it is time to order more products and how much to order. However, if you do not have an automated system, it becomes more complicated. You must determine your demand forecast – how many units you are likely to sell in a specific time period. Furthermore, it is important to know how much to order as well. If a retailer runs out of a product before a new shipment comes in, that can drive down sales, whereas ordering too many units can cause a loss of profits.
To avoid these issues, using automated product replenish solutions is often key for retailers and online shops to be the most successful in selling their products as possible. Using forms of IoT, algorithms, and special complex programs can take care of product replenishment and make the whole process automated. Automatic product/store replenishment takes the guess work out of figuring out your best product replenish strategy. These types of systems can place thousands of orders per day and considers all of the important factors a store manager would, and even more factors not thought of, but often with much more accuracy, as there is no human error. This raises the accuracy and consistency of retail product replenish in retail and online stores.