Stockroom mismanagement can be a killer on profits. When you’re not managing your stockroom correctly, you could end up maximizing your costs, rather than your revenue – and the most frustrating thing of all is that stockroom issues are so easy to fix!

That’s why you should think about investigating your current stockroom operations and seeing if anything is going wrong somewhere down the chain. If you don’t, you could end up paying costs like these.

No Timely Replacements

If a customer gets a bad batch of a product sent to their door, they’re going to complain about it. That’s OK – you’ve got the chance now to fix the issue by offering an apology and sending out a replacement for free! But if that replacement takes ages to get there, you’re going to lose any and all goodwill you’ve been able to claw back through this interaction.

And the main reason the replacement takes an age to arrive? Stock room mismanagement! Either there’s little in the way of an inventory system, allowing you to just grab what you need, or you haven’t got any replacements in stock in the first place. Either way, you’ve lost a customer, had to refund them, and could end up with more negative press than you really deserve.

Losing Out on Space

You may only have looked into a small warehouse space for rent in the first place, but by misusing the space and allowing wasted areas to crop up, you’re really letting yourself down. After all, you now have less room to even pack your stock vertically!

Fewer shelving units can be put in place or mounted on the walls, and you’re working with a lot less stock than you really need to be. This can even tie into the issue we outlined above, and that can have a big impact on your bottom line.

So now’s the time to have a look at your stockroom and see if things have been set up in the most optimized layout.

No Forecasting to Work with

If you don’t forecast in the long term to see the kind of sales you’re likely to make, you’re not going to be able to outfit your stockroom appropriately in the first place. That’s what forecasting is for.

Look at previous sales data here for an insight; how much stock tends to go per month? How much stock tends to be returned or asked to be replaced? If you don’t have any idea about these numbers, you’re never going to pack your shelves right and give yourself the easiest time in addressing your customers’ needs!

Stockroom mismanagement is more costly than you may think. The longer you let issues like those above go on for, the more profit you’re likely to lose. Make sure you tackle issues like a lack of forecasting and wasted space before they turn into truly costly issues. And above all, don’t ever let a customer service issue go on for too long.