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While inventory demand has been at an all-time high during the coronavirus and its corresponding pandemics, there might actually be some advantages to restricting your inventory during COVID-19.

Earlier this month, Amazon – the obvious bellwether for the warehousing industry – announced that they would be restricting inventory in certain areas to help manage the flow of orders during the COVID-19 pandemic. As COVID-19 doesn’t seem to be going anywhere, Amazon’s new restrictions reflect their warehousing strategy through the holiday season: focus on big-ticket items while restricting quantities across nearly every product category to ensure all sellers have enough space to store their goods.

 

Sure, your warehouse probably isn’t as big as your average Amazon facility, but as the fourth quarter looms large (and coronavirus shows no signs of slowing down in America), there could be some advantages that this approach lends to your warehouse.

In addition to allowing you to focus more on the important aspects of your inventory, this can actually help solve a number of supply chain issues along the way. Of course, this approach might not fit for every warehouse, so you should ask yourself a few questions before embarking on this approach:

 

Do I deal in a lot of seasonal items?

Try as we might to extend sales throughout the year, any warehouse that deals primarily in retail products knows the truth: most sales happen around the holiday season. To that end, take a look through your stock and see if you have any products that only move during certain times of year, as these products may benefit the most from reduced stock levels until things start getting a little closer to ‘normal’.

 

Do I find myself running out of space a lot?

A lack of room on your warehouse shelving is an issue any warehouse can encounter, but temporary inventory reductions might be the best way to start regaining control of your shelf space. Take a look at your pallet racks and see what items tend to take up the most space, what items show up as miscounted the most in inventory checks, and what items just don’t move as fast as they used to, and then either find a new home for them, reduce the number of each SKU you carry, or both.

 

Do I share warehousing space with other clients?

Public warehouses or shared warehouses are a more common sight today than they’ve ever been, thanks to the increased need for warehousing brought about by e-commerce. These warehouses, however, can run out of space even faster due to the variety of products and number of clients using them. If your warehouse serves several different clients/residents, you may need to start placing stronger restrictions on the amount of products each of them can store.

 

Have you encountered a lot of issues with your supply chain?

Of course, inventory restrictions don’t just impact the number of items you currently have on-hand at any given time. As we’ve all learned the hard way over the past few months, supply chains and logistics providers are having a tougher time than ever getting products to the warehouses (and customers) that need them. Reducing your inventory might actually help reduce your issues with supply chains, as companies will be better equipped to provide smaller quantities of needed items faster than they can fill bigger orders, whether it’s going to your warehouse or directly to customers.

 

Can you schedule a rotation for each product?

Reducing inventory doesn’t mean you need to completely do away with each one. Set a schedule for how much product you can keep on hand at once – Amazon set a limit of “three months’ worth” of each item, although that will vary greatly depending on what you sell and how much you’ll need at any given time. Setting this sort of rotation can go a long way towards freeing up shelf space and reducing the strain on your vendors and providers, while still offering a way to fulfill orders as needed.

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