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5 Tips On Effective Warehouse Inventory Management

By Tracey Heinz

There’s an old saying in the distribution industry which still holds true to this day: He who stays organised stays ahead.

From the outside, warehouse management seems like a simple enough task. All you have to do is keep track of your inventory, make sure your labour is doing their job, and manage shipments. Sure, everything is escalated slightly because of the huge volumes involved, but it’s not really a complicated task. Right?


Warehouse management is as much about controlling the flow of inventory to and from the facility as it is about ensuring productivity and efficiency, which increases the difficulty of the job tenfold.

Anyone can put items in their respective places and count the stock daily. The goal is to do this while also saving time and money, not just for your business’s sake, but also because customers demand it.

With competition in the B2B industry at an all-time high, no distributor can afford slow turnaround times or high prices.

Price margins are an even bigger headache, especially after the recent E-commerce revolution in the industry. Retailers are increasingly choosing to buy products directly from the manufacturers since they offer much better rates than distributors do.

In times like this, every dollar you save through smart inventory management is half a dollar you can knock off your prices.

This is why effective warehouse management is so important. Not only does it help you optimise your operations, thereby saving a lot of time and money, but it also helps you deliver superior customer service.

So how do you manage your warehouse operations like a pro? Here are 5 tips that should help:

1.  Plan The Space

Planning a Space

The cheapest way to increase warehouse efficiency is to make sure you account for every inch of space before any stock is purchased.

Ask any of the industry’s pros, and they’ll tell you that storage space is one of the biggest, if not the biggest expense you’ll incur as a distributor. Entrepreneurs don’t realise how expensive warehouses are until they actually go and buy/rent one for themselves. 

By planning the space well in advance, you get the maximum usability out of your warehouse and ensure that you don’t get overwhelmed when the orders start to roll in.

Also keep in mind that the space should be organised in a way that allows forklifts and other machines to move around freely. You’ll also need to consider what kind of products you’ll be dealing with, since the open spaces will need to be adjusted accordingly.

2.  Predict Stock Requirements

Predict Requirements

Unless you’re working in the food industry, you’ll know that every product has seasonal demands. There are always specific months when the demand skyrockets, and also months where it slows down to a crawl.

Use this to your advantage and only order as much stock as you can actually move. Ideally, this is number is around 1.5 times the average demand.

Remember: While it’s always better to be overstocked than understocked, keeping products lying around in your warehouses for long periods of time means you’re paying an additional overhead expense.

Stock prediction can be done by identifying historical trends and using smart inventory management software.

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3.  Place High Selling Items At The Front

 Products in the Front Row

If you know an item is in high demand, place all new shipments of it somewhere near the front of the warehouse.

This minimises a lot of labour cost you would otherwise incur in moving the product from the back to the front every few weeks.

On top of that, your staff will be extremely grateful as well because they won’t need to do tedious labour work as often. It’s a win-win situation!

There are plenty of software solutions available in the market which will analyse your sales history over the past few months/years and identify all your top sellers. The software also allows you to sort the items by time so you can prepare for the relevant season.

4.  Don’t Overstaff

 Planning Staff

Overstaffing is a common mistake amongst inexperienced distributors and retailers. They get overwhelmed by warehouse management at the start and end up hiring far too many people.

Yes, it’s great to have all the support you can get when you’re starting a new business, but it’s very easy to get used to the comfort of having so many people around. It’s important to keep in mind that more employees means you’ll be paying more salaries every month.

Instead, try and automate as much as possible. Smart tools represent a one-time investment that save businesses a lot of money in the long run.

We also recommend that you organise employee training sessions regularly. This might feel like a needless expense, but on-the-job training has been proven to increase workplace productivity by up to 70%.

5.  Keep Similar Items Separate

We can understand the appeal of stock similar items together, but avoid this practice as much as you can, especially if you have an automated product pickup system.

The problem with placing similar products together is that you create room for confusion. Warehouses often have 50+ different items and it’s impossible for your staff to be on their toes 110% of the time. They’re only human after all, and mistakes will happen.  

Machines aren’t any different either. Yes, the software-led robotic arm is far less likely to accidentally pick up the wrong package, but there’s a high probability it might accidentally pick a slightly different colour of the same product.

Remove the possibility of any mishaps happening in the first place by keeping similar items away from each other in the first place. It’ll feel slightly awkward at first, but you’ll start to see the benefits when orders begin to pile up.


These warehouse inventory management tips will help you optimise operations and increase the overall productivity of your business. Once productivity starts to increase, costs will automatically go down which is the end goal for any smart distributor.

With costs in control and smart time management, you can concentrate all your efforts on delivering unmatched customer support and blowing your competition out of the water.

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Tags: Retailers, Distributors

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