3 tips for reducing inventory risk

Inventory has always been one of the biggest risk factors for retail. Even the best case scenario for unsold items involves significant markdowns and/or selling to off-price retailers to recoup initial investment. Just a few quarters of sales disruptions (like some retailers are experiencing with COVID-19) can lead to bankruptcy as capital remains frozen within unsold inventory and revenue dries up. Ascena and Brooks Brothers are facing that grim reality right now.

Here are three tips for lowering your overall inventory risk:

  1. Accelerate and grow your drop shipping operation
  2. Improve inventory visibility with real-time inventory feeds and unit level tracking systems like RFID
  3. Expand omnichannel initiatives like BOPIS and Ship from Store that allow you to sell cross-channel inventory

More drop shipping will give you access to expanded assortment without increasing upfront investment. Improved visibility will help you better sell the inventory you already have, avoiding markdowns and stale/distressed inventory. Omnichannel initiatives like SFS will enable you to sell more of your owned inventory, reduce opportunity costs, and expand online assortment.

Here’s to huge reductions in your company’s inventory risk!

PS: It’s been said many times before, but omnichannel really is the future of retail. The reason is simple. The more inventory you open up to cross channel selling, the more opportunities you’ll have to make sales and the less inventory risk you’ll face.

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Dsco is the world’s most powerful Distributed Inventory Platform, making it easy to see, share, and sell inventory from any source. Thousands of the largest retailers and brands on the planet use Dsco to power world-class omnichannel strategies such as drop shipping, direct to consumer, ship to store, and more.

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