Author: Vương Vũ
Update: 26/09/2022


Inventory management is one of the important tasks for retailers. Why inventory management? The reason is that good inventory management will help businesses grow profits.

When stock is under control, management will have the ability to estimate stock availability for sales. Besides, businesses also avoid the case of excess goods and reduce inventory management costs.

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Inventory management

Why do you need inventory management?

1. Minimizing out-of-stock and shortages

Controlling inventory will help businesses, especially retailers, avoid the situation of not providing a good customer experience.

Management can use inventory management tools to control the number of goods in stock, ensuring that the capital for best-selling products is always greater than the amount of inventory.

2. Profit margin optimization

Effective inventory management will cut inventory costs while fulfilling orders. Accordingly, the profit margin of businesses and retailers will be significantly improved.

Optimizing profit margins with efficient warehouse management

3. Increase omnichannel sales performance and order conversion rate

If you have multiple sales channels, it will be difficult to capture total inventory across all channels.

When integrating an effective warehouse management solution, will help businesses optimize the number of goods at different points of sale, in order to help products be introduced to consumers more quickly.

4. Streamlining operations

Management levels, when handling goods well in the sales stages, will help the business' sales increase. In addition, the receipt, execution, and shipping of orders will take place smoothly, minimizing unnecessary errors in the operating apparatus.

Here are the reasons why you need to manage inventory. The problem is how can we prevent storing too much inventory. Let's continue to learn in the content below.

Streamline warehouse operations

Methods of preventing inventory

1. Deposit

With this method, ownership of the goods remains with the supplier and the wholesaler. However, retailers are still allowed to store items in stock.

When the goods are sold to the final consumer, the retailer pays the supplier for the goods. This method will optimize upfront costs for retailers.

2. Dropshipping

Drop shipping saves retailers from having to stock the goods they sell. When customers need to order, retailers only need to place orders directly with suppliers.

The supplier will then deliver the goods directly to the buyer. This method will optimize the cost of handling and storing inventory for retailers.

3. 3PL

It will be easier for retailers to expand and cut costs with the benefits of inventory handling, outsourcing, and order fulfillment to 3PLs.

4. Cross Sort

Goods will be exported directly for delivery without the need for warehousing. Outgoing goods can be shipped to end consumers or distributors and retailers. This solution helps reduce inventory for businesses.


In summary, some of the reasons why inventory management is important to include (1) optimizing profit margins, (2) increasing omnichannel performance and order conversion rates, and (3) avoiding pitfalls. out-of-stock and out-of-stock situations, and (4) streamlining operations.

In addition, to be able to prevent too much inventory, businesses can apply the method mentioned in the article.


Meksmart is a pioneer smart warehouse management system (WMS) supplier in Vietnam. We offer a full range of logistics and inventory-related services, from real-time processing of inbound and outbound tasks, and inventory management, to data integration and reporting. Configure inventory information.

Admin Meksmart