What stock classes you have in your e-commerce

What stock classes you have in your e-commerce

07/14/2021 - Pricing strategy

Do you know how your warehouse stock affects the price strategy of your ecommerce? Knowing the organization of your catalog inside out and the logistics of your warehouse is fundamental to optimize your pricing strategy. The first thing you should know is that distinct stock classes that exist in function of how you can organize it physically, what its relationship with the demand is and its useful life. Watch out for these points that will help you avoid cost overruns  in your stock management.

Stock types according to functionality

This classification of stock types is defined by its relationship with the demand and sales projection of your e-commerce. 

  1. Minimum stock: the minimum product quantity necessary to cover your sales projection. Calculating a upper deviation percentage will help you establish reposition alerts when a certain determined level of sales is reached. 
  2. Maximum stock: the maximum product quantity that you have the capacity to store and that should not be exceeded to avoid cost overruns for maintenance or deterioration by not reaching its sale. 
  3. Optimal stock:  the stock that, calculating using the minimum stock and without reaching the maximum, allows you to cover your sales projection and maintain a remnant that does not suppose losses for your e-commerce. 
  4. Security stock: this is the percentage of the stock that allows coverage of a sales peak produce by delays in providers or anything else unforeseen. Calculating it is fundamental for avoiding a stock out in your ecommerce
  5. Seasonal stock: this is the extra stock that you should have at specific times to cover sales peaks already predicted by market knowledge. 

Stock types according to logistics 

In this case, the stock differs in the function of storage that it supports and its relationship with shipments.   

  1. Physical or available stock: this is the most obvious stock, what you really have in your warehouse, admissible units for sales and orders in your store. This stock is calculated once the orders in preparation have been subtracted and counting the units pending receipt by your suppliers. 
  2. Net stock: The total stock units of your products, either for reference or based on all of your catalog. 
  3. Stock in transit: stock that is in the reserve, delivery, or course of entry process by delivery note to your warehouse. It is an unconfirmed type of stock that serves as a reference to know what the total volume is and to adjust the forecast of the rest of the other types. 
  4. Replacement stock:  the stock that you need about every reference to cover the sales units and reach the optimal market. 

Stock on demand: this is the stock type whose management is carried out on request, usually added to the available stock thanks to previous confirmation of a number of minimum units with a supplier.

stock classes you have in your e-commerce

Stock types according to useful life 

This stock type is classified according to the maintenance conditions of the product, as well as your sales circumstances. 

  1. Inactive or surplus stock:  these are the products units that are not waiting to be sold anymore, because most of the time, they are out of order. 
  2. Perishable stock: this is the stock that will suffer a rapid release from the warehouse  because of their conservation conditions. This type of stock can carry other logistic conditions like temperature control, stacking, or the need for special containers like cold rooms. 
  3. Nonperishable stock: this is the stock that, contrary to the former, can be stored with less urgency for release because of its less demanding maintenance. 
  4. Stock with expiration: this is the stock that, being perishable, has a concrete expiration date. 

It should be noted that these types of stock are not mutually exclusive and many references of your ecommerce can be in one or another category. The objective is that you categorize the most groups in your catalog to manage the catalog of your e0commerce in a mor efficient form. 

How to apply these facts in an intelligent way once collected? A stock management tool for your ecommerce allows you to control units of every product, marking alerts once they reach the established limits to always count on the long-awaited optimal stock. Do you already know the advantages of the Demand Forecasting Software from Reactev?

Category: Pricing strategy

Tags: ecommerce, pricing

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Maria Jose Guerrero
Content Manager

The first dynamic pricing solution designed by and for retailers