The Dead Stock Nightmare: How Disconnected E-Commerce is Killing Your Cash Flow

The Cash Flow Drain

What would happen if $100,000 in cash were placed inside a box and put away for two years in a dark warehouse? Not one single business person would want to do this. This is what happens financially when a company holds dead inventory-products that have been bought but no longer sell.

Dead inventory does not just drain money that was spent once but continues to do so via storage expenses, insurance payments, and the opportunity cost of storing dead items rather than profitable ones.

Whereas dead inventory can result from a change in consumer preferences, a huge proportion results from technological ignorance.

> Blind Digital Storefront

If the B2B vendor or the retail shop uses some general disconnected e-commerce site (Shopify or Magento, for instance), then only information that the human admin enters is available to the system.

In case there is no demand anymore for a certain variation of the product (for example, size XXL in a certain color or some particular car accessory), then the disconnected e-commerce site just buries it away on page 7 of the catalog.

All the while, the manager of the warehouse looking at the old inventory spreadsheet will see only numbers of units but not sales velocity.

No one will realize anything happened until the year-end inventory check when it will be too late already.

> Active Forecasting using Isaii Visual Inventory

In order to prevent dead stock from happening, the digital store needs to be integrated with the intelligent warehouse.

Using Isaii Technologies' customized E-Commerce Web Application allows organizations to access the Visual Inventory tool. Such architecture eliminates traditional static spreadsheets in favor of active workflow management tools.

• Velocity Monitoring: The Isaii system monitors the "velocity" of every single SKU. The exact number of units sold daily, weekly, and monthly by SKU is known to the system directly from the connected digital storefront.

• Stagnation Predictive Alerting: In case the AI notices that the velocity of the item dropped below certain level for 60 days, it marks the SKU in the executive dashboard as "High Risk for Stagnation" independently.

• Automatic E-Commerce Sync: The warehouse and the website are synchronized digitally and can act on their own accord. Thus, when an SKU is marked as stagnating, E-Commerce module can launch a special 15% off offer campaign on the website automatically, putting the product on the home page to sell off the remaining inventory.

> Intelligence for Liquidity

The inventory should not be considered as a stationary pool of resources but as a continuous flow of cash. If you can’t keep track of how fast it flows through your software, then you are sure to accumulate those pools of unutilized inventory sooner or later.

Don’t let your warehouse become a museum for dead stock. Come over to isaii.in and see for yourself the capabilities of Isaii Visual Inventory and Custom E-Commerce Solutions.