The concept of supply and demand is central to business. What consumers want and the price they are willing to pay for it make up the demand. Supply is the stock business holds and the price that they are willing to sell it for. When there is a balance, there is a free flow of goods since there is adequate supply at an agreeable price for both consumer and supplier.

If there is a distortion, one side won’t be happy. As a business, it is in your best interest to have adequate supplies at the right price to keep consumers happy. If you have too much stock, you may have to price it lower (potentially at a loss) to keep your business going. Alternatively, if your supply is low, you may lose customers.

Manage Your Inventory

Inventory is the basis of all ordering needs. Whether your business has enough office supplies, raw materials, or stock relies on your inventory management. You don’t want to have too much or too little supply on any inventory. Ideally, your inventory management strategy will:

  • Reduce your costs, improve cash flow and add to your profits. You can achieve this by buying at discounts, lowering transport costs or any number of tactics.
  • Provide tools to give you real-time inventory levels and analysis.
  • Give you the tools to help you forecast demand.
  • Prevent shortages. If you don’t have stock, you are not making sales and frustrating your customers.
  • Ensure that you don’t hold too much stock because it will raise your storage, handling, and insurance costs.
  • Optimize warehouse organization and precious employee time.
  • Enable you to track inventory in multiple locations or warehouses.

Balance E-Commerce Needs

Customers have high expectations for service delivery; they want their orders quickly and cheaply. If they don’t get good service, your business will suffer reputational damage. When it comes to e-commerce, business reputation is your biggest asset.

To manage your stock as it comes in and goes out, you need an e-commerce fulfillment services provider. A fulfillment service provider will store, handle and transport your inventory. The services are ideal for any e-commerce business because they will enable you to:

  • Store as little or as much stock as you need. The flexibility means you don’t have to tie up your resources in inventory, warehousing, or staffing costs.
  • Gain the services of a cutting-edge warehousing operation without the capital outlay.
  • Leverage the fulfillment service’s geographic spread to enter new markets with ease.
  • Focus on what makes your business profitable, like manufacturing and marketing.

Adapt to Change

Supply and demand can change for several reasons: economic, political, environmental, social, or demographic. Changes in the market or the economy may require a business to shift its goods or services. For example, the music industry switched from cassette tapes to CDs, then MP3s, and is now streaming online. The best-selling artists and recording studios adapt to the changes and stay afloat, focusing on streaming rather than selling physical copies.

Change in the industry can affect demand, and if your supply doesn’t match it, your supply will suffer. There was a time when a single CD album cost $10. Consumers are now listening to limitless music libraries for less than $10 per month.

Adapting doesn’t mean any trend should sweep you. You need to be clear about your values and vision for your business. To have a competitive edge, you must create an environment and culture that accepts new ideas, thinks on its feet, seeks out knowledge, leverages technology, and still sticks to its core values. Once that’s in place, your business will have a solid foundation to evaluate and take advantage of changes in the market.

Ask for Feedback

Listening to feedback allows you to provide what the consumer wants. You will also get a sense of their perceptions regarding your product, service, and the market. Sometimes the reasons for demand change are not at the macro-level (political, environmental, social, etc.); other times, it’s down to how you deliver the product.

Customer satisfaction is vital for retaining and gaining new customers; without feedback, you will not know how they feel. If you are getting things wrong, you will have the data to help you improve and potentially get the customers back. Change is constant, so it’s only through feedback that you can gain insights on changing consumer behavior. With the information from feedback, you can make informed decisions on the market’s direction and business.

Maintain the balance

Balancing your supply with the market demand is key to increasing your revenue and keeping your costs low. Lean on your technology, staff, and customers to always stay abreast of the market. Have the processes in place to recognize any changes in the market, and your business won’t suffer as many shocks.

LEAVE A REPLY

Please enter your comment!
Please enter your name here