Automate Your Shopify Store
Learn about the best ways to automate your e-commerce business and manage your inventory across multiple Shopify stores.
InventorySupply and Demand: 5 Techniques to Manage Overstock and Understock in Your Shopify StoreSupply and demand is a fundamental concept of e-commerce. It’s like the yin and yang of online shopping. You can’t have one without the other. But what happens when you have too much of one and not enough of the other?
That’s where overstock and understock come in. Overstocking can lead to increased storage costs and the risk of products becoming obsolete, while understocking can lead to stockouts and lost sales. Below, we explore different ways and expert tips to help you manage your stock.
5 Techniques to Manage Overstock and Understock in Your Shopify Store
Analyze Sales DataUse Sales Promotions and DiscountsUse an App for Inventory ManagementOffer Bundles and Product KitsImplement Dropshipping
1. Analyze Sales Data
Sales data reveals much about your customers' preferences, patterns, and future demands—factors critical for making informed decisions about stocking up or scaling back product offerings. By gathering insights into how shoppers interact with your store, you can estimate the upcoming demand and plan inventory levels accordingly.
Expert tips:Track your sales performance over time and examine it for variations in the seasons, spikes, and dips. This can help you decide when you need to stock up or clear away certain products.Sort your sales data into segments such as product, category, channel, location, and customer type. This can aid you in figuring out if products are more popular, profitable, or in-demand among different groups of customers.
» Use your sales data to conduct easy Shopify inventory forecasting
2. Use Sales Promotions and Discounts
Sales promotions and discounts are marketing tactics that help you provide temporary price reductions or incentives to your customers, including buy one get one free, free shipping, or a percentage off. This has a dual advantage: move inventory quickly and generate more revenue while also rewarding customer loyalty.
Expert tips:Use urgency and scarcity to create a sense of FOMO (fear of missing out). For example, set a time limit or stock limit for your offer and display a countdown timer or a stock indicator on your product page.Segment your customers and target them with personalized offers based on their behavior, preferences, or loyalty. For example, send an email campaign to loyal customers with an exclusive discount code or offer a free gift to first-time buyers.
» Find out whether customer loyalty discounts really work
3. Use an App for Inventory Management
Inventory management can be quite daunting for Shopify store owners, so incorporating an inventory management app can streamline the whole process significantly.
Bestsellers Resort by Egnition is an all-in-one app that provides an extensive set of rules to automatically sort and organize your products into collections. Each collection has customizable sorting rules based on product type, sales, revenue, publish date, tags, and other features. You can also manually add featured products to the top of collections.
The app can help you to:
Optimize your online merchandising strategiesOrganize your products in unique ways that best suit your storeIncrease ROI and drive growth
4. Offer Bundles and Product Kits
Offering bundles and product kits not only helps you move more goods, but also raises the perceived worth of your products and encourages customers to purchase multiple items.
Think of it like getting a two-for-one deal at your favorite store—except instead of getting two of the same things, you get two things that go together like peanut butter and jelly.
Expert tips:Make sure the products in your bundle or kit are complementary. For example, if you’re selling a camera, you could bundle it with a tripod or a camera bag.Offer a discount or special price for purchasing the bundle or kit to encourage customers to buy more products.
» Discover how to combine discounts on Shopify to incentivize customers to buy more
5. Implement Dropshipping
Dropshipping is a strategy where you collaborate with a supplier who sends the products customers have bought on your store straight to them. This eliminates the need for you to store inventory or distribute things yourself. Plus, it can help you increase your product variety and offer more options to your customers.
Expert tips:Look for suppliers who have a good reputation and positive reviews. Check out websites like AliExpress, CJ Dropshipping, or Spocket to find suppliers.Make sure the supplier has a good return policy and customer service. This will help you avoid any issues with customers down the line.Integrate your dropshipping supplier with Shopify by using an app like Spocket or CJ Dropshipping. These apps allow you to easily import products from your supplier and fulfill orders automatically.
Give and Take: Master Your Inventory Management
Effective inventory management is crucial for the success of any Shopify store. By implementing the techniques discussed in this post, you can manage your inventory levels more effectively and avoid issues like overstocking and understocking. Not only can these techniques help you increase your sales and improve customer satisfaction, but they can also help you reduce waste and save money.
Additionally, inventory management apps like Bestsellers reSort are designed to help you track your inventory levels, identify your best-selling products, and make informed decisions about your inventory management strategy.
Discover more ways Bestsellers reSort can help you optimize online merchandising and inventory management
Inventory5 Strategies on How to Get Rid of Obsolete Inventory on ShopifyAlso known as deadstock inventory, obsolete inventory can be a serious drawback for e-commerce businesses looking to grow significantly over time.
Obsolete inventory refers to unsold inventory that's no longer useful or in demand.
While obsolete inventory can occur for several reasons, including customer preferences, technology enhancements, or changes in market conditions, it's important to clear it because it can take up your store's space and capital. If you're wondering how to get rid of obsolete inventory in your Shopify store, here are five simple strategies you can employ.
1. Remarket Your Inventory
Remarketing is a great way to get rid of your obsolete inventory and minimize financial losses. If you think the items in your obsolete inventory still have the potential to grab the market, a good remarketing strategy can help you sell them after all.
The elements your remarketing strategy should contain include the following:
Repositioning the items in your online store for greater visibility.Highlighting more product features.Using optimized product images.Advertising the products through different communication channels like email and social media.
2. Provide Discounts
Another simple yet effective strategy to empty your dead inventory is offering marketing incentives like various discounts. While this approach will impact your profit margin, it will grab you more customers as easily as possible. You can initiate this strategy by offering a smaller discount, like 10-20% off, and then increase it as necessary to sell your leftover products.
» Follow these simple steps to create a percentage discount on Shopify
3. Return the Items to Your Supplier
As an effective way to minimize losses, you can also look into whether your supplier accepts returns. Depending on why your inventory is obsolete, you'd ideally be able to exchange your leftover items for one of the following options:
Full refund.Selling the items back at a steep discount.Supplier credit.
While this can result in minor costs because you'll need to pay for shipment, it beats the alternative of having to eat the inventory cost.
4. Try Bundling Products
Creating product bundles is a great way to boost sales of both your obsolete inventory and new products similar to it. With bundling, you can encourage customers to purchase your leftover products by grouping your new products with obsolete inventory that complements them in some way.
Additionally, bundling can create a sense of urgency and encourage your customers to purchase sooner rather than later, freeing up your obsolete inventory and making room to effectively organize new products.
5. Liquidate Your Inventory
If you've tried all the tips we mentioned but still got unsatisfactory results, you can look into liquidating your inventory. However, you should use this strategy only as your last resort if your business is at risk of going bankrupt.
This strategy involves finding a liquidator and selling your obsolete inventory at a steep discount, which they'll then resell to other retailers or customers. While this inventory management option isn't as profitable as other strategies on our list, it can come in handy to free up your store's space and capital for other products. Just make sure you research reputable liquidators to ensure you're getting the best price.
Turn Your Shopify Store's Obsolete Inventory Into Profit
Obsolete inventory can negatively impact your Shopify store in several ways. It takes up valuable space and ties up the capital that you could use to purchase and launch new products as well as invest in other business areas.
That's why you should take the necessary steps as a shop owner to clear obsolete inventory as soon as possible. The above-mentioned strategies are all effective ways to get rid of your obsolete inventory and save costs. By combining these strategies with a reliable inventory management system, you can keep your store organized and profitable in the long run.
InventoryPreventing Obsolete Inventory in Shopify: 4 Best PracticesAs a Shopify store owner, you may face considerable difficulties if your inventory becomes obsolete.
Obsolete inventory refers to unsold products that are no longer useful or in demand.
Preventing obsolete inventory is essential to avoid wasting valuable resources that could be put to use elsewhere. Although you can dispose of obsolete inventory, it's preferable to prevent it in the first place to minimize your store's losses.
To help you decide how to prevent obsolete inventory, we'll look at four best practices you can employ in your Shopify store to achieve this goal.
» Not sure whether you have obsolete inventory? Here's how to identify it
1. Optimize Your Demand Forecasting
Optimizing your demand forecasts is one of the best strategies to stop obsolete inventory. Precisely calculating consumer demand for your products can help prevent both understocking and overstocking, which can lead to unsold goods.
Using reliable software can help you predict demand more accurately and guarantee you never have too much product on hand. Also, it's crucial to consider seasonal variations and other elements that could affect demand.
» Make the most out of your Shopify inventory forecasting
2. Perform Regular Inventory Audits
To avoid having obsolete stock, you should conduct inventory audits often. This involves physically counting and confirming the inventory levels in your store for improved inventory management.
While end-of-year inventory audits are useful, they might not be enough to prevent obsolete stock. Instead, performing audits more regularly like monthly or quarterly may be a better idea to ensure the early detection of at-risk inventory before it becomes obsolete.
3. Avoid Impulsive Stock Orders
Before placing large product orders for your Shopify business, carefully evaluate your inventory requirements to prevent outdated inventory. While ordering items in bulk can be a good way to save money, you should opt for realistic product amounts and set accurate reorder dates to avoid accumulating unsold inventory.
It's crucial to stay away from rash stock orders based on a hunch or a trend. To make wise order decisions, evaluate your sales data and base your orders around it.
4. Use Reliable Inventory Management Software
To prevent obsolete goods in your Shopify business, dependable inventory management software is a crucial tool. Using real-time inventory tracking can help you adjust your products accordingly and minimize the possibility of financial losses.
In addition to helping you prevent obsolete inventory, reliable inventory management software can help you keep better track of your stock in all aspects, maintaining the constant performance of your Shopify store.
» Learn how to get rid of obsolete inventory with ease
Keep Your Shopify Store Financially Stable
Shopify store owners may suffer severe financial losses as a result of holding outdated goods. By learning how to prevent obsolete inventory and putting these recommended practices into effect, you can ensure your Shopify store keeps operating steadily without having to clear deadstock products.
To make the most out of your inventory, make sure to prevent obsolete inventory before it becomes a problem by opting for automated inventory management, improving your demand forecasting, doing routine inventory audits, and avoiding impulsive stock orders.
InventoryExcel Inventory Forecasting: Tips, Tricks & TechniquesAccurate inventory forecasting can help you reduce inventory waste and prevent obsolete inventory in your Shopify store while promoting financial health by ensuring adequate stock levels are always available.
Inventory forecasting, or e-commerce forecasting, helps e-commerce store owners better manage their inventory by predicting future product demand based on real-time inventory trends and historical metrics, such as past sales data.
To reap the benefits of accurate inventory forecasting, such as supply level optimization and refined pricing and sales strategy, you can try what many brands do and use Microsoft Excel to conduct your inventory forecasts.
However, while Excel can give you useful insights into sales trends and demand changes, it can be difficult to make out exactly how to forecast inventory in Excel—but we bring you useful techniques and tips to make the process easier.
» Supercharge your Shopify inventory forecasting
3 Techniques for Creating an Inventory Forecast in Excel
Excel is a popular tool for demand forecasting because it's cost-effective and can use conditional formatting. Although it can be error-prone and a bit time-consuming, it can still be an effective inventory forecasting tool that can help you ultimately improve your inventory turnover if you know how to use it properly.
1. Moving Average Technique
The moving average method can help you predict your future inventory demand by looking at the average value of past buyer trends and patterns over a given period. This method "moves," because it takes new data into consideration. For example, if you choose to calculate your average over a 3-month period, this method will use the data from January, February, and March. But next month, the data from February, March, and April is used instead.
Using an average gives you a baseline and helps combat fluctuations that might give you an incorrect reflection of your inventory demands. You can use this formula to calculate your moving averages:
Moving average = Select the revenue earned from the current month + X number of prior months + apply this formula: =AVERAGE(Data Range)
2. Linear Regression Technique
The linear regression technique predicts demand by comparing two different variables—for example, the number of umbrellas sold vs. rainfall amounts. In this example, if you’re forecasting umbrella sales, you'd use the rainfall amount as your independent variable and compare it to the number of umbrellas sold over a certain period to predict future demand more accurately.
To employ linear regression in Excel, follow these steps:
Create three columns and choose one to contain each of the 12 months:
Fill the other two columns with data related to the variables you wish to examine (e.g., rainfall in millimeters and the number of umbrellas sold):
Select the two columns with data and insert a scatter chart into your spreadsheet
Add a linear trendline to the data points:
Your finished graph should resemble this:
3. Exponential Smoothing Technique
Exponential smoothing predicts demand by smoothing out historical data, such as seasonality patterns and confidence intervals. Follow these steps to implement this technique yourself:
Go to the Data menu in Excel:
Select "Forecast Sheet":
Pick a suitable chart (e.g., column or line chart):
Select your end forecast date:
Click "Create" to generate a worksheet with a sales forecast:
» For more accurate forecasts, consider your pipeline inventory as well
3 Tips to Optimize Excel Inventory Forecasting
When using Excel for inventory forecasting, the data isn't always perfect as it can only give you static information. However, you can make the most of Excel's features by optimizing your inventory forecasting using the following tips:
1. Customize Visual Data
Excel offers several customization options that you can use to optimize your inventory forecasting and avoid having to get rid of obsolete inventory. For example, you can customize the visual timeline for specific ranges with color coding and other visual cues that make it easier to understand the data at a glance.
2. Choose a Suitable Forecast Function
While creating inventory forecasts in Excel, you'll be able to use different forecast functions to guide your forecast predictions, such as:
FORECAST: Predicts a future value with linear regressionFORECAST.LINEAR: Has the same purpose as FORECAST, just for newer versions of ExcelFORECAST.ETS: Used for exponential smoothingFORECAST.ETS.SEASONALITY: Calculates the length of a recurring pattern in a timeline to detect seasonalityFORECAST.ETS. CONFINT: Calculates the confidence interval for a forecasted valueFORECAST.ETS.STAT: Determines a specific value based on exponential smoothing forecasting
3. Rely on Third-Party Apps and Templates
Finally, you can also leverage Excel's existing functionalities with third-party software and pre-made forecasting templates. You can simplify the whole process by using tools like Asana, Salesforce, and Monday.com, or downloading free excel templates like this one from HubSpot.
» Get helpful demand insights by tracking your inventory on Shopify
Simplify Your Excel Inventory Forecasting
While Excel is a powerful tool for inventory forecasting, it can also be tedious. However, you can streamline the process and create a more accurate inventory forecast using techniques like linear regression, moving averages, and exponential smoothing. Excel's customizable visual data and third-party software or templates can help you further optimize your inventory forecasting.
Understanding how to properly use Excel for inventory forecasting can help you make better decisions about your stock levels and ensure you have the right products at the right time.
InventoryInventory Turnover: Definition, Formula & Impact on Profitability (With Examples)Does inventory turnover sometimes feel like a mystery to you? Certain products take forever to sell (even after you've discounted them many times), while others just fly off your shelves (figuratively speaking).
Firstly, you must understand that inventory turnover is a balancing act between your sales and stock. Think of a scale: if you increase your sales but don't keep enough stock on hand to fill your orders then you can lose those sales. But if you have few sales, then your stock levels can remain high and cost you money instead of making it.
Secondly, inventory turnover is a key performance indicator that helps you understand how well you're running your store and if your profitability is healthy.
Keeping these two points in mind, let's try to demystify inventory turnover more.
» Compare the best inventory management systems for your Shopify store
Inventory Turnover Defined
Inventory turnover is the ratio of cost of goods sold (COGS) to the average inventory value over a period of time.
This ratio helps you measure how quickly your products are selling and how efficiently you're managing your inventory.
High inventory turnover rate indicates that you're selling your products quickly and efficiently. Low inventory turnover rate suggests that there's an issue with either pricing or product availability.
As we've already discussed, this is a balancing act and you need to find that sweet spot between high and low to ensure your long-term profitability. If your rate is too high, you may not have enough stock available to meet customer demand. If it's too low, you may be carrying too much stock and tying up valuable capital in unsold items.
» Follow these tips to manage your Shopify inventory better
Formula for Calculating Inventory Turnover
Inventory Turnover = Cost of Goods Sold (COGS) / Average Value of Inventory
You can compare your inventory turnover number to industry standards or previous years' results to get an idea of how well your business is performing.
Now, let's break the formula down.
Cost of Goods Sold (COGS)
COGS represents the total amount it cost your business to purchase, manufacture, and deliver all the goods you've sold during a specific period.
Average Value of Inventory
You can calculate average inventory by adding your beginning and ending stock levels over a specific period together and dividing them by two.
Example of Inventory Turnover
Let's put the formula into practice:
Let's say your business has $50,000 worth of cost of goods sold over the past year and an average inventory of $20,000 over the same period. To calculate your inventory turnover rate:
COGS / Average Value of Inventory$50,000 / $20,000 = 2.5
In this case, your inventory turnover rate is 2.5—meaning it takes your business two and a half times to turn over its entire inventory during the given period.
The Key to Profitability is Lowering Your COGS
COGS has a direct impact on your profitability because it determines your gross profit.
Gross Profit = Revenue — COGS
Gross profit shows you if you're at least selling your products at a good enough price to make a profit. So: are you getting more out than you're putting in?
By lowering your COGS, your gross profit can increase and you can get a better balance between your inventory and sales.
Strategies to Lower COGS
There are a number of strategies you can use to lower your COGS, including:
Negotiating discounts from suppliersBulk buying when possibleImplementing just-in-time inventory management techniquesUtilizing barcode scanning systems to accurately and efficiently track your stock levelsUtilizing software to track purchasing trends and identifying potential savings opportunitiesAutomating ordering processes where possible
» Can decoupling inventory help your online business?
Don't Toss and Turn Over Inventory Turnover Anymore
It's difficult to determine what a good inventory turnover is, because it depends on your industry and if you manufacture your products yourself or buy products to resell.
By keeping an eye on your inventory turnover ratio and profitability, you can make informed decisions about your business's stock levels and overall purchasing strategy. With a bit of strategic planning and diligence, you can ensure that you are making the most of your inventory and achieving a profitable balance in the long run.
» Explore Egnition's Shopify apps to simplify inventory management
InventoryBulk Inventory Management: Weighing the Pros & ConsIt's important for any e-commerce business to have an efficient inventory management system in place, but especially when you manage bulk inventory.
Bulk inventory management (BIM) has 3 steps: ordering your stock in big quantities, storing the stock while it sells, and re-ordering new stock as you sell out.
Below, I examine the advantages of BIM while also weighing its potential risks. By understanding both sides, you can make an informed decision about whether BIM will help you manage your Shopify inventory better.
4 Advantages of BIM
With BIM, you can manage and track inventory levels, order fulfillment, and product availability. This makes keeping an eye on your products, orders, and customers easy.
Let's discuss the advantages of BIM in more detail.
1. Access to Bulk Discounts & Wholesale Pricing
By ordering large quantities of stock, you can negotiate with your supplier for a better price. In turn, you can use this extra margin to adjust your own selling prices or run specific promotions that will help your store stay competitive in the ever-changing online market.
2. Reduces Risk of Product Shortages
Perhaps the most obvious advantage of bulk inventory is that your risk of running out of these products decreases. It also means that you're less likely to lose customers and sales to competitors because your products are available.
3. Accelerates Order Fulfillment
Building on the previous point: if stock is readily available then it's easy and quick to fulfill customer orders. Think of the great impression your store and brand make if you can deliver a full order on a tight deadline. Customers don't have to wait for backorders or search for another store that can supply them sooner.
4. Enables Swift Replenishment
Depending on how quickly your bulk products sell, it's easy to monitor the stock levels and place another bulk order for these products as your stock levels dwindle. You also don't have to re-order that often compared to single products that you keep in minimal quantities.
» Here's how an automated inventory system can help you
5 Disadvantages of BIM
Despite its above-mentioned benefits, BIM also has drawbacks—particularly when it comes to cash flow and warehousing. Follow along as I delve into this more.
1. No Margin for Error in Sales Forecasts
Without a margin for error, you can't plan ahead if sales don't meet expectations. This can lead to overstocking or understocking, causing your business significant financial losses in the long run.
» Opening inventory: Determine how much inventory you should start your Shopify store with
2. Warehousing & Storage Solutions Become Costly
Warehousing and storage solutions can become costly. Firstly, you'll simply pay more for the space necessary to store your bulk inventory as opposed to the space for a few items because you only order stock as you receive customer orders. Secondly, if your sales forecasts are incorrect, you must still pay to store your products regardless of if they're selling or not.
3. Higher Risk of Inventory Becoming Obsolete
Another potential risk is that inventory may become obsolete if you don't sell it in a timely manner. This may happen if you don't effectively monitor and adjust your inventory levels or you don't properly plan your inventory forecasting, particularly when it comes to products that are seasonal or a temporary trend.
» Learn how to clear deadstock inventory
4. Minimizes Available Cash Flow
BIM can affect your available cash flow greatly. Again, if your sales forecasts are incorrect, you may end up with an overstock of certain products. This means that your cash is tied up in excess inventory that's costing you money because you still need to pay your supplier, storage, insurance, etc.
5. Typically Results in Higher Insurance Premiums
Your inventory is always valuable, but even more so when you work in bulk. Consequently, your insurance premiums can be higher because as your inventory levels increase, so does your risk. You need to properly insure your inventory against damage, theft, etc.
» Find the best inventory management system for your Shopify store
The Verdict
I recommend bulk inventory management as a strategy for well-established companies. Whenever you work with large quantities, you must be able to capitalize on economies-of-scale, otherwise the venture isn't worth it. If you're a start-up or a young company, your risks are far greater at the moment than the advantages you would gain from this strategy. The costs of warehousing and insurance alone might make it unfeasible.
But whether or not you opt for bulk inventory management for your store, having a better grasp on your out-of-stock items can't hurt. For my own store, using the Out-of-Stock Police app by Egnition greatly improved my inventory management strategy.
InventoryMy 6 Expert Tips for Managing Pipeline Inventory to Meet Customer DemandInventory management is an essential aspect of any business. What you might not realize is that inventory isn't limited to managing only the stock currently present in your warehouse—it also extends to pipeline inventory.
Pipeline inventory refers to stocks that are in transit between locations and has not been purchased by a consumer.
Remember, regardless of the lead time and demand rate, once the payment is made to a supplier, the product becomes your inventory.
1. Keep Track of Each Step of the Process
I usually start by tracking where my pipeline inventory is in the supply chain, and I make sure I know how much time the manufacturing and transiting stages will take. This includes considering what aspects of my surroundings can lead to disruptions such as crises, accidents, disasters, or pandemics.
Accuracy is vital so I like to create a single source of truth across multiple suppliers and freight forwarders. I use a host of different tools, including spreadsheets and real-time scanning technologies via barcodes, stock-keeping units, and smart devices.
2. Ensure Accurate Demand Forecasting
Demand forecasting means I need to know how much a product will be in demand in the future so that I can align my stock according to that demand. Like with the previous step, accuracy is key because I don't want to be overstocked or understocked. I find that going through all the seller reports I get from my e-commerce platform helps with this.
There are a number of factors that can influence customer demand for a product or service. Some of them are:
Pricing: High prices tend to decrease demand whereas low prices lead to high demand.Quality: Customers are more likely to demand a product or service that is highly qualified.Features: Customers tend to demand a product with certain features such as ease of use, durability, and so on.Competition: Lack of competition can lead to high demand.Brand reputation: Consumers are more likely to buy from a brand they trust and perceive as reliable.
» Haven't done inventory forecasting before? Here's how
3. Consider Placing Safety Stock
Safety stock is an essential aspect of a business. It means that I set a certain amount of stock aside so that I can keep on meeting customer demand if any mishappening should occur at any point in the supply chain.
So, safety stock serves as backup inventory and is invulnerable to the risk of losing customers and production slow-downs which can happen because of transit or manufacturing issues.
4. Implement Third-Party Integrations
Integrating third-party apps with my pipeline inventory management system helps to enhance the functionality and capabilities of my system. Useful apps like Katana (manufacturing) and Ordoro (inventory management) can help a pipeline inventory management system access and utilize additional data, automate certain processes, and improve the overall efficiency and effectiveness of managing pipeline inventory.
5. Establish a Real-Time Inventory Management System
Establishing a real-time inventory management system with the help of software like Cogsy, Zoho, NetSuite, or Fishbowl allows me to improve real-time visibility and control over inventory levels so I can optimize my operations and make better, more informed decisions.
6. Automate Your Inventory Management Process
Finally, my last tip is to automate inventory management processes where you can. Stop performing tasks manually like drawing up stock reports. The right software will automatically provide these, thereby streamlining your reordering process. In some cases, you'll even be able to auto-replenish your stock and keep a certain amount of inventory on hand at all times.
Automated processes can also help you forecast sales and lead times. This means that pipeline stock can be adjusted on the fly, automatically ensuring you can meet all of your customers' future orders.
» Explore these best inventory management systems
The Verdict
Almost all e-commerce retailers must deal with pipeline inventory and just overall inventory issues in the supply chain. I suggest starting by identifying and qualifying pipeline inventory before you move on to balance your cash flow and supply. You don't want to undersell or sit without stock. By effectively managing your pipeline inventory, you'll be more than capable of dealing with changing customer demand—and thereby monitor the impact this has on your profitability.