Author: Ashley Brown Nov 25, 2021 4 Min READ

Top 10 Insights from the Experts: Optimizing Replenishment

4 Min READ
Top 10 Insights from the Experts: Optimizing Replenishment


Where is optimizing replenishment on your priority list? Does it ever get put on the back burner? We asked our experts if it should be a top concern and they unanimously agreed! Improving your purchasing process doesn’t have to be scary.

Learn why replenishment is imperative and how to execute new practices from ten of our favorite industry leaders below. The advice doesn’t stop here, our experts will share their advice on a plethora of other topics so get ready for more to come!

1. Try the 60/40 Replenishment Rule

“If you don’t have mechanisms in place to help you protect the sales for your best products that have consistent consumer demand year-round, then you’re likely leaving money on the table. Regardless of how often you forecast, plan, and launch new inventory, a good rule of thumb for brands to strive for is a product mix that is approximately 60% basics. Meaning, about 60% of your total inventory is made up of products that you carry, sell, replenish, and market all year long. These are core pieces, and what your customers come to know and love you for. The other ~40% should be “fashion” or more seasonal items. Because of this, it makes sense for retailers to automate replenishment on basics, which drive their core business, and then layer on shorter-term fashion buys seasonally." - Taylor Daniel from FOMO Agency

2. Demand Forecast First

Replenishments must be done after demand forecasting. Marketplace sellers must be very clear with the concept of evergreen demands and fad demands. Only after analyzing these two, the inventory replenishment must be done. It is to be noted that the evergreen demands can be optimized, but the fads must be analyzed manually and the replenishment must be done accordingly.” - Saket Tripathi of CedCommerce

3. Assist Your 3PLs and Vendors

“Optimizing replenishment can save operators hours of valuable time and free up the team to focus on the important work of sourcing new products, developing new marketing strategies, & more. If team members are spending more than 10 hours a week on the same tasks, then these should most certainly be automated away. Merchants should consider using an automation tool to automate spreadsheet management to calculate how much should be reordered, and also to automate communication and data handoff to 3PLs and vendors.” - Sara Du of Alloy Automation

4. Utilize a Feed Tool

“Each minute without a product in stock can lead to a possible loss in a sale. Use a feed tool that manages all of that in an easy-to-use interface. A tool like this provides fast processing of orders and their track & trace fulfillment. Price comparison tools that are automated will also help you to win more clients because of important features like the Amazon Buy Box where you need to be competitive with your prices.” - Pawel Fijak of DataFeedWatch

5. Don’t Miss The Boat, Embrace Predictive Analysis 

“100%!!! Over-ordering is just as problematic as under-ordering, both are extremely costly. Without a tool in place to see the movement of items on the marketplaces in terms of sales velocity and how that is changing day to day there is no visibility in a streamlined fashion to have the predictive analytics to determine what really needs to be replenished. Combine that with varying lead times, vendor relationships, etc and most sellers are missing the boat completely on what and when to re-order...making extremely ineffective purchasing decisions.” - Shannon Sharpe of Extensiv 

6. Focus on Best Sellers

“We hear from our customers, they share that they need better control on their inventory and purchasing. Especially right now, our clients are looking for ways to automate replenishment and purchasing processes. Timely replenishment prevents lost revenue due to stock availability. Especially high velocity selling items have to be planned well. We recommend our clients focus on their 10 best sellers and do better job replenishment and distribution. Both are equally important when creating a winning strategy for fulfillment.” - Gary G. of StoreAutomator 

7. Benefits of Just-in-time-processes

“The ideal replenishment cycle would ideally closely resemble a just-in-time process, where one unit of supply is immediately met with similar demand. Whilst no supply chain is that simplified, the theory is still sound and a replenishment or purchase process should always endeavor to get as close as possible to that just-in-time goal. Doing so reduces the amount of working capital deployed and thus increases the available cash flow for growth initiatives. It also greatly reduces the risk of overstocking.” -Adii Pienaar of Cogsy 

8. Factor in Reorder Points

“Definitely yes. It is the number one opportunity to increase sales and improve cash flow at the same time. It's something that divides the successful from the struggling at the end of the day. However, factoring reorder points and safety stock into your replenishment calculations will help you better manage both your current inventory and future order quantity. While implementing a reorder point strategy may not address the whole puzzle, it provides a more exact basis for your stock replenishment schedule. The more things you can take the guesswork out of, the better for your organization's bottom line.” - Tania Manzo of Inventoro 

9. Strategize - Congested Freight

“With how congested freight is today, I would lean towards optimizing against LTL (less than truckload) and FTL (full truckload), and container shipment loads. I would still look at quantity breaks in relation to unit costs in relation to what your forecast of expected demand is. Right now, costs are driven high by rising raw material, labor, and shortage of containers and trucks. Depending on what your good is, you may not have the opportunity to optimize against that as you could be forced to purchase the MOQ amount. If that is the case, optimize against the cheapest freight option and not being reliant on air if importing.” - Dan Magida of Anvyl 

10. Prepare A Contingency Plan

“Yes, demand planning and new ways of forecasting are the way of the future. Here at Skubana (now Extensiv), we offer a baked-in automatic purchase order reordering tool that serves as a 24/7 employee to help reorder future products based upon variables such as your sales velocity for specific warehouses or maybe based on the number of days you plan to keep the items in stock. If you wish for more granularity outside of Skubana, then we partner with some of the industries best in terms of forecasting and demand planning abilities for maintaining products within your stock, such as our partner Cogsy. Optimizing replenishment is very important and highly recommended as it helps ensure you have all contingency plans in place, should you run out of stock. Also, you can anticipate and make any necessary adjustments if your business decides to change it up and push different products one season vs the next. At the end of the day, you as a Seller should always do your research, but we are more than happy to help you along this journey here at Skubana.” - Rodolfo Villarreal of Skubana

Interested in learning more about how Extensiv can help you avoid under and overselling your inventory?


Written By:
Ashley Brown

Ashley Brown is the Partner Marketing Manager at Skubana. She’s passionate about people, thinking outside of the box, and ecommerce!

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