What Makes Stock Conversion an Integral Part of Warehouse Management?

December 5, 2019

An efficient warehouse management ensures that a company utilises every resource they have in order to gain revenue at all times. One integral part of making sure this is possible is through stock conversion. Stock conversion is simply the process of turning unsold stocks into sold merchandise. When your stock products just sit on the shelves taking up space, it is not earning you any revenue. Also, you have to practice this conversion all throughout the year to obtain maximum results. Below are the things that make stock conversion an integral part of warehouse management.

Eliminates Shortages

Stock conversion allows you to track your supplies thereby eliminating shortages. If you track incoming, in-stock and outgoing stock at all times, it allows you to control your inventory efficiently and accurately. By doing this, you can eliminate shortages and for that fact, overages in stock, both of which can decrease your profitability. Today, computer software, barcodes and other help aids are available to perform this tracking quickly and effectively. You can even receive reports from the software on a wide variety of details about your stock.

Determine the Rate of Demand

Stock conversion is an integral part of warehouse management because it determines the rate of demand among your products. If you track your stocks, you will be able to determine your slow and fast movers in your stock. This is important due to the fact that it is easy to overstock slow movers and limit your storage space of your fast movers. You can balance out your stock and even save money when you are vigilant about this.

Speeds up Slow Movers

Since stock conversion allows you to distinguish the slow movers from the fast ones, you must then take the necessary measures to push the slow movers to sell them at a more rapid rate. Additional marketing strategies such as promotional ads and sales are two ways of accomplishing this in an ideal way. Not only will you increase your revenue by doing this, but you also will make room on the shelves for more fast moving stock.

Discover Your Inventory Turnover Ratio

Another part of stock conversion is to know your stock or inventory turnover ratio. You can figure this by measuring the number of times that your stock is sold within a specified period of time. Thanks to present computerisation methods, you can figure this ratio easily and accurately for each one of your stock items if you so desire. If your ratio is too low, this points to possible liquidity problems. Of course, the ideal rate is different for each company and therefore, you must customise it to fit your unique circumstances.

For more information about warehouse management, contact Challenge Packaging and Warehousing Solutions. We will provide you with effective methods to ensure that your stock conversion is performed in the ideal way. We specialise in this service along with a wide assortment of other services that will help your business be as profitable as possible at all times.

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