Inventory costs and how to keep a check on them - Dash101 Blog

How to Keep a Check on Your Inventory Costs Post-COVID?

seasonal inventory

Inventory seems like a dreadful word to many. And that is because there are a lot of details level processes going behind, that are often overlooked by sellers. With inventory comes the fear of inventory costs and its management. The point is that small business owners don’t want to get into all these. All they want is to save money and increase their profits. 

But, the fundamental nature of inventory in eCommerce suggests that there will be costs. In other words, if you own inventory, you will have certain costs to shell. And these are inevitable. However, that doesn’t mean you’re always on the side of losing money.

eCommerce is in fact a very promising affair. Your business idea in eCommerce can make all the difference and help you earn a reputation all across the country. All you have to do is stay aware of its different aspects. And make sure that you take the right decision from the beginning. 

Most sellers commit this mistake of neglecting the details of eCommerce. They are strongly lured with the profits and earning a brand name through marketing efforts. However, when their business begins to grow and they have more people to partner with, that’s where the problem begins. Their inventory costs begin to rise and slowly they sink in debt.

This is the reason most eCommerce businesses give up just after a few days of launching in the market. They dream too quickly and put in too little efforts. But, don’t get scared. We’re here to help you fight your inventory costs.

Read on to find out the best ways to keep a check on your inventory and reduce inventory costs.

13 Amazing Ways to Reduce Your Inventory Costs

If you’re already at a stage where your inventory costs have risen up, this is for you. On the contrary, if you’re someone who is just stepping into the world of inventory management, this could be your checklist. The following ways will help you get through your inventory with ease and reduce inventory costs like never before. So, what are you waiting for? Read on and discover these ways-

Reduce Your Stock Levels

If you’re lookin at this for the first time, chances are that you’ll find this point to reduce inventory costs makes no sense at all. However, this isn’t the case. The reason why we’re asking you to reduce your inventory is because it makes sense for quite a lot of businesses. In case you’ve ever been in retail, you will understand that inventory costs can mean too much. In fact, keeping too much inventory sometimes makes no sense after all.

 This tactic usually makes sense for businesses who are selling exclusive products. For example, if you are an apparel brand that is selling dresses, you can take orders in advance. Once you have sufficient orders, prepare to create or fetch these dresses after that.

Order From Product Manufacturers 

If you have a business idea that will sell products instantly, this is for you. Alternatively, if you’re already selling something that naturally sells more, you should definitely try this. Contact a manufacturer and directly purchase products from them. We’re talking about fast selling products for this tactic, because manufacturers usually deal with bulk products. So, if you are already selling these products, you can directly contact the manufacturer and purchase from them. They have lower product costs as compared to suppliers and distributors. In case you find a manufacturer that is giving you a good deal, don’t shy away from negotiating. 

Manufacture Products on Demand

In case you’re in the line of business manufacturing products on your own, this idea might be suitable for you. Instead of creating products and storing them for long, produce them as you receive the orders. For example, if you are selling handicraft items, start creating them only once the product has been purchased by the customer. This lowers your inventory storage and maintenance costs. 

inventory costs

Hunt for the Best Wholesale Deals

If you’ve been in a particular business slime for sometime, you should know who the major manufacturers and suppliers are. Try to build a deeper relationship with the wholesalers by hunting them down. There are various directories that have wholesalers listed on them. You could use these or use your general research skills to find the new wholesalers. This way you can always find the best deals on the products and take advantage of seasonal offers in one or more areas to reduce inventory costs.


Never Forget to Negotiate

It doesn’t matter if you think that your supplier is giving you a good price on products. Remember that there is always a room for negotiation, no matter what. Depending on the number of sales you make, you can further bargain a suitable price from the manufacturer or wholesaler. Sometimes the business is slow,but that doesn’t mean that the products are not selling. Therefore, as a business you have to leverage such opportunities and find suppliers to negotiate a deal with to reduce inventory costs.  

Request Free Shipping

If you are selling a heavy item, this will not work in your favour. In other words, you can request for free shipping from your wholesaler or manufacturer for a specific line of products. For example, if you are in the business of jewellery, beauty, accessories or more, you can receive lucrative deals on shipping. Lightweight products that have enough profit margins can be negotiated for free shipping. Even if your supplier doesn’t agree for free shipping, they will agree to provide you a discounted deal. This will lower your inventory costs. 

Use the Best of Dropshipping and Your Stock

Sometimes it can be a good option to try dropshipping along with you in house business. It is no doubt risky on low quantities, but if you’ve got a new product that is selling fast, there is no harm in trying. Many times eCommerce sellers end up spending money on their marketing strategies. However, they end up in an out of stock condition, due to which their efforts turn to vain. When you dropship a certain product line, you are reducing your inventory costs directly. 

Make the Most of Your Warehouse Space

Make the most of your warehouse space to reduce inventory costs. This is a must for all kinds of businesses. If you’ve been neglecting the importance of a well- organized warehouse space, it is time that you consider the other way. In other words, you have to optimize your warehouse space. This way you can accommodate more inventory. Alternatively, you can also understand which of your inventory is in what condition. Remember to organize the space in your inventory strategically. Create the space asn out products that sell together closer. Similarly, keep your highest selling inventory in the front shelves. 

Avoid Any Intermediaries

If you have any intermediaries in the business, it is time that you look past them. Believe it or not but intermediaries eat into a lot of your inventory costs. To avoid these, it is best that you remove these from your way. Directly establish relations with the supplier or manufacturer. Then try to negotiate a deal with them. Resell from them instead of reselling from a distributor. This is because intermediaries have their own profit margins involved in business. Therefore, no matter how less of a price they are offering to you, you’ll always find a lower deal with the manufacturer. 

Bulk Purchase

Purchasing items in bulk is also a method to reduce your inventory costs. But, you have to make sure that you do it for the inventory that sells more. Purchase your products in bulk so that your product costs become even lower. Manufacturers sell their inventory in bulk. And generally, the more your purchase from them, the lower the shipping costs become. 

Examine Your Product Lines More Carefully 

It is best to examine your product lines. There might be a possibility that you are selling a product that needs high maintenance and is already expensive. Therefore, you are not able to make a lot of profits on them.

Say Goodbye to Your DeadStock

It is important to clean your inventory once in a while. Having said that, get rid of your dead stock that has been sitting for more than one year. It means that such products do not have a selling capacity and you’re most probably shelling inventory costs on them. 

Avoid Any Spoilage 

Avoid any spoilage of the products in your warehouse. This can cost you additional inventory costs. Therefore, organize your warehouse and use an inventory management tool to your rescue. 


Once your inventory is taken care of, the next thing to do is to manage and choose the best shipping provider. Remember that inventory and shipping always go hand in hand. If you lower your inventory costs, but you are unable to manage shipping, you’ll be again losing out on your hard earned money. It is best to partner with a 3rd party logistics provider like Dash101 that helps eCommerce sellers ship to 26000+ pin codes at the lowest shipping rates that start at Rs 23/500 gms.


Before you go, don't forget to subscribe to our blog.

Our confirmation email includes link to download our app.