Understanding Inventory Shaping and Market Forces

For those business models that rely on procuring and selling inventory for their revenue, it is essential for the people who handle the inventory to have a clear channel of communication with the marketing team. There are companies where that isn’t always the case, resulting in wasted money and slow reaction time. Slow reaction time is excruciating, especially in today’s marketplace. But in contrast, quick reaction time and a dialed-in inventory will let you eat into a competitor’s customer base.

So what do we mean by clear communication? There are certain areas and stats that Marketing needs to look at periodically and then communicate that information to the Inventory Management team. That could be weekly, bi-weekly, or monthly. Let’s take a look at some of those areas.

Item Traffic

One of the critical statistics across the board for the Marketing team is always traffic. This can be broken down into many sub-components, but no matter what, we always look at traffic and conversions (more on conversions another time). Item traffic is simple – how much traffic does an item receive? A category of items? Brand, model, trim level etc.? But it is more than just your website; what about other platforms? Almost all of us now sell using listing/shopping services like eBay, Amazon, Auto Trader, Craigslist, etc. Each of these platforms is competing with each other to give us a sophisticated analysis of our inventory.

Chronological Traffic

Sales can and often do vary by time. If we build up and store historical data, we can use this to project demand, significantly impacting how we shape inventory. There is seasonality – does weather affect your sales? Does it involve some areas of sales more than others? What about holidays or significant shopping days like Black Friday (assuming your business makes retail sales)? Accurately projecting demand and demand for specific categories of products can allow you to take advantage and sell into surges or reduce the money tied up in your warehouse when traffic slows.

DMA (Designated Market Area) Traffic

Sometimes we only work within a single DMA, but other times we have stores in multiple locations over a large area, even nationally. It is important to understand traffic and interest within these audiences. This knowledge allows the inventory team to make smarter decisions knowing that they can take advantage of predictable, changing trends to reduce swings in demand.
There are even more areas of analysis that a solid Marketing team can provide to management to help guide business decisions on the procurement side. Too often, people think of the Marketing department as a black hole that money disappears into, and a radio advertisement magically shows up every few months. In today’s fast-moving, digital and highly competitive marketplace, an intelligent business must develop more skills and methods to succeed.


The flow of information from Inventory Management back to Marketing is essential too. It allows a company to take advantage of manufacturer holdback, quantity buys, logistics savings, and financial savings.
Our goal is always to increase sales/move products. If we know in advance when there will be a surge or requirement to sell specific items or services, we can develop an effective plan to make it happen. Look at the demand geography, plan the message and get in front of as many of our target audience as possible.
As a member of the Marketing Team, we can analyze and report on lots of data. The critical point is that information can be valuable to other stakeholders in the company.

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