Overstock can lead to an increase in logistics costs and other unsafe consequences for the company. Here the five main didvantages related to excess inventory:
1) Inefficient handling and flows of goods: the need to keep more goods in the warehouse limits the possibilities of carrying out an efficient slotting. The greater the volume of items to be stocked, the more difficult it will be to manage the warehouse.
2) Deterioration of stocks: a bad management of warehouse inputs and outputs can compromise shelf-life or product traceability, two crucial aspects in sectors where you work with perishable goods (the pharmaceutical or food industry, for example).
3) Increase in storage costs: an excess of inventory leads to greater investments in areas to be used for logistics. In addition, the expenses to be made in equipment and workforce for warehouse management increase.
4) Bad business reputation: mistakes in any warehouse operation impact on the quality of service offered. Excess stock increases the error rates in orders preparation , causing dissatisfaction and complaints from customers.
5) In addition, overstock reduces profit margins both due to the decrease in demand and because, in case of increase in supply, the company will have to invest in larger logistics facilities to increase its storage capacity. It could be also necessary to buy automatic storage systems capable of managing logistical flows.
In this regards, The Mesh represents a valid channel to sell your excess materials.
You can use the “Manufacturing & Supply” area to place ads to sell your excess inventory and start discussing with interested users. The Mesh will explore any possible business opportunity for your products also outside the platform, leveraging on a growing professional network.