That might sound like a pretty backwards idea to anyone with experience in the industry, but follow us for a bit.

Inventory reduction is a necessary part of any business, although a lot of warehouses don’t quite get as in-depth with it as they should. When was the last time you had to clearance out a low-performing item, or had to send a shipment of something back to the vendor because it just wasn’t moving anymore? It was probably a big pain, and the lost revenue isn’t anyone’s favorite part, but your operations and inventory were so streamlined after the fact it probably felt pretty good in the long run.

This sort of thinking could be applied to more of your inventory, in general. Not every item you carry is going to be a million-seller, and not everything you carry is going to sell through in its entirety. By reducing the amount of items you stock, both throughout the warehouse and on a per-SKU basis (meaning you carry less of each individual item even without reducing the number of SKUs you stock), you can actually save yourself a lot of time and money in the long-run.

The biggest benefit to reduced inventory is the reduction of overall operational costs. Even popular inventory costs money to store—there’s maintenance that needs to be performed both on the inventory and on your warehouse shelves, there’s the cost of storing these goods, there’s the labor involved with managing an inventory of that size, and it can all add up pretty quickly. Instead of looking into renting out additional warehouse space or bringing in extra storage, see what you can do to pare down your inventory. By freeing up some extra space on your pallet racks and wire shelves, you can store more of the items you do need without the additional overhead and labor requirements of items that aren’t selling as well. Without the cost needs of storing less-popular items, or greater quantities of items in general, you can then turn that investment into items you need more of that will move more quickly.

Reducing your inventory footprint will also offer you greater flexibility in what you carry and how you can move it, as well. Vast order quantities may have worked in previous eras, but in today’s fast-paced world of product advancement and ecommerce sales, product lifestyle is shorter than ever. Carrying a smaller inventory will allow you to be more flexible with the products you carry, and help you stay on top of trends and upgraded products such as phones and tablets that have something of a shorter shelf-life.

There’s many ways to manage your inventory, and the demands and requirements of every warehouse will be different. However, by considering a strategic reduction in current inventory, you may be able to make your warehouse more financially successful in the long term.