Inventory forecasting practices play an important role in the prosperity of e-business, due to its great role in improving inventory planning, as well as promoting the development of the online store. In the digital age we live in, there are many tools that help you accurately inventory forecasting, thus taking decisive steps in developing your online store and increasing your presence in the market. These forecasts are based on data and trends of market forces, and in this article we will show you all the details about inventory forecasting. We will also talk about its benefits as well as how Diggipacks systems can help you provide the best tools for the best prediction of your inventory level.
What is inventory forecasting?
Inventory forecasting is the process of forecasting the inventory levels that you will need over a specific period of time, which may be a month, a quarter, a full year, and so on.
And that is by relying on historical data, seasonal trends and market forces, in order to determine expectations of future demand, and accordingly determine the quantity of inventory required.
Owners of online stores can take advantage of inventory forecasting practices to know the expected demand quantity and, accordingly, determine the expected inventory.
Thus, it avoids the problem of low inventory or its sudden depletion, while also avoiding the problem of excess inventory, and all this is reflected in its sales well.
Benefits of accurate inventory forecasts
Benefits of accurate inventory forecasts
There are many benefits associated with inventory forecasts, which mainly contribute to enhancing your online store and market presence.
Here are some of the most important benefits of inventory forecasts that your online store can benefit greatly:
1. Anticipating and fulfilling customer demands
One of the most important and important benefits of inventory forecasts is to provide the products that customers want, by forecasting and then fulfilling their demand.
Which helps you in making customers happy and satisfied with the service you provide to them, thus preparing for customer requests and not losing them.
This means continuous sales without losses and maintaining your position against your competitors, and this is because you are fulfilling customer demands and not making them behind.
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2. Improve cash flow through inventory management
Inventory forecasts help you manage inventory effectively, avoiding over or under stock situations.
As you can get accurate forecasts and build your inventory management accordingly, which helps in maintaining stock levels.
As well as maintaining an ideal inventory turnover rate, which helps you in improving your business cash flow visibly.
3. Strengthening supply chain management
Inventory forecasts about customer demand help you provide better management of your supply chain, thus avoiding fees and overheads and improving your relationships with suppliers.
Inventory forecasting methods
There is more than one way to forecast inventory, and the following are the top 5 primary methods that can be used in the process of Inventory forecasting:
1. Trend forecasting
It is one of the most important Inventory forecasting methods in which your sales data and trends in a product category are used to draw a picture about changes in demand.
All of this contributes to anticipating future demand for different products, as well as consumer behavior by relying on historical sales data.
Taking into account changes in the velocity of sales, over long periods of time and not just following seasonal shifts.
2. Quantitative forecasting
It is one of the methods used in Inventory forecasting, by using the sales history of your online store.
If you have many years of historical data about your sales history, you can get a more accurate forecast of your inventory.
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This method relies on using seasonal sales data, as well as information about future events, in order to anticipate future demand.
The factors and dates of the major seasons influence the forecasting process made with this method, and historical data from the same season for as many years as possible is used in the forecasting process.
4. Graphical forecasting
Among the forecasting methods used to forecast stock in the future is the use of graphical forecasting, which is a separate method different from the previous methods.
Through it, historical sales data are obtained and possible scenarios are drawn for customer or consumer demand in the future.
5. Qualitative forecasting
This method relies on the use of external data points such as economic trends in forecasting consumer demands.
This method also uses political issues affecting the market in forecasting stock volume.
Inventory forecasting best practices in eCommerce
If you want to achieve the best inventory forecasting in your business, there are a set of effective and proven practices that can help you make a difference.
The following are a number of the most important suggested practices that will help you in forecasting future demand, and thus enhancing inventory forecasting in your e-commerce:
1. Make accurate inventories
So that you can have a more accurate forecasting process, you need to make accurate inventories, which will help you to enhance the forecasting process even more.
Thus, obtaining a high level of inventory forecast accuracy, and you can hire a logistics partner to help you with this.
Smart Diggipacks can effectively help you provide more accurate inventories, by utilizing the best methods and modern technology.
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2. Regularly adjusting the inventory forecast model
You will also need to adjust your inventory forecasting model periodically, to see how well those demand forecasts align with customer demand.
This is to avoid any errors or disruptions affecting your sales, as you will find that sometimes you need to adjust inventory forecasting methods or data inputs.
This is so you can get more accurate data, so always compare your order forecast with the actual results you achieved.
If you find that there is any defect or inconsistency, you must make immediate adjustments to your order forecasting model to achieve better results.
3. Establish a period for stock forecast
An effective practice in inventory forecasting is to specify a specific period to start the forecast itself. Standard periods for inventory forecasting are one of the following options:
- 30 days.
- 60 days.
- Quarter of a year.
Determining the forecast period will help you get more up-to-date and accurate data by collecting recent sales data and market trends during that period.
How Diggipacks helps eCommerce businesses achieve inventory accuracy
Diggipacks is one of the best companies specialized in providing logistics services, relying on the latest technologies and technological methods.
Collaborating with Diggipacks as a logistics partner can help you achieve greater accuracy of your inventory, using the latest smart tools in forecasting and inventory management.
Diggipacks has an expert team that specializes in order accuracy and inventory, which will give you the best services at the best prices and give you a comparative advantage in terms of speed and efficiency.
So Diggipacks is your perfect choice if you are looking for a professional logistics partner that will help you manage your products and keep your inventory accurate.
As well as its ability to provide the best shipping and delivery solutions in addition to providing smart storage solutions at the best prices.
Where it owns all the spaces needed by special products, with an economic plan while ensuring the high quality of storage.
As well as full packaging services for its stored products, in addition to the ability to provide you with daily reports of your stock movement through the customer control panel.