Demand Forecasting and Scalable Revenue Growth with Inventory Planner
Inventory Planner helps merchants streamline inventory procedures by forecasting buyer demand for thousands of products in minutes. Users can track KPIs across 30+ platforms, automate reordering processes, and optimize stock across multiple warehouses.
To dive deeper on how sophisticated inventory management correlates with recouped revenue, we sat down with Jill Liliedahl, the vice president of revenue at Inventory Planner and an experienced DTC founder herself.
When to Bring In the Pros
As Jill describes it, Inventory Planner’s core objective has always been to help merchants avoid lost revenue—filling a gap in the market for a tool that can accurately predict customer demand for upcoming restock cycles.
As a result, the IP team empowers businesses to avoid two sunk-cost scenarios: running out of inventory (and thus potential revenue) and drowning in overstock that clogs up the broader product pipeline.
Inventory Planner is especially helpful for younger startup teams, typically composed of experts in product development, marketing, or other consumer-facing areas, as opposed to team members who work in the “back office” and manage vendors, as Jill describes them.
Thus, by using Inventory Planner’s platform, these growing ventures (annual revenue starting at $1 million) can continue to direct resources to their areas of expertise, allowing Inventory Planner to save them time, confusion, and capital.
According to Jill, early-stage businesses can typically manage a great deal of inventory by winging it in Excel spreadsheets. But after hitting the first million ceiling, brands typically find it’s time to restructure.
They’re ready to introduce new, heavy-duty tools for efficient inventory management, rather than trying to throw more bodies at an ever-growing task.
“Even if you’re not in dire straits with declining revenue, everybody can use this degree of efficiency and insight into managing their ecommerce inventory.”
Right Products, Right Time
- Running out of stock—and thus losing revenue—because they can’t work out the right numbers
- Wasting too much time and effort trying to predict inventory needs
- Sitting on too much stock sitting on warehouse shelves
Before arriving at Inventory Planner, many of these businesses are running on spreadsheets, in an attempt to calculate what stock is on hand and how much will be needed.
But, as a former Inventory Planner user herself, Jill admits that many early, founding teams are also simply employing guesswork when forecasting. Her own barebones inventory system mainly consisted of walking around warehouses to suss out what her team needed to restock.
Flash forward to today where these businesses are working with the IP team and are now running sophisticated formulae and inventory tracking.
As Jill puts it, regardless of annual revenue or maturity, businesses can introduce Inventory Planner to upgrade inventory operations and subsequently maximize revenue, in a way that most founders do not realize is possible beforehand.
“We help establish or level up merchants’ inventory operations, as well as help them become more efficient at the broader process. Many don’t realize how much better off they’ll be for it.”
Inventory Metrics Primer
When asked how brands can easily begin to optimize their inventory management, Jill mentioned two fundamental metrics to track.
In order to best isolate and define problematic trends in your inventory management, the IP team recommends tracking the forecasted lost profit as a KPI, or the projected amount of lost revenue that’ll be incurred if a restock order isn’t placed.
On the other end of the spectrum, as previously mentioned, brands can also identify overstock across warehouses and receive recommendations from the IP team on how best to liquidate, free up inventory, and so on.
Jill says new clients are often taken aback by the degree of stagnant stock, or unrealized cash, they’re sitting on.
Overall, keeping a pulse on forecasted lost profit will allow brands to regularly answer questions — from “How much will we lose without this item?” to “How much money can we redirect if we move this tied up product?” — with precise metrics, as well as jump-start the search for a solution.
And on the other side of the same coin, the IP team advises understanding the replenishment profit on any potential reorders, essentially gauging the ROI on restocking any SKU, which helps businesses understand how funds and tasks should be delegated accordingly.
“If you go all in on improving your inventory maintenance—whether that’s with us or not—you’ll see healthier cash flow and product turnover.”
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