warehouse inventory management on ipad

Inventory Turnover: Warehouse Management Systems

The right warehouse management system (WMS) can help improve inventory turnover in your business. Your WMS should not only manage what you currently have, but forecast what you may need in the future.

Analyzing Inventory Turnover

With the world experiencing shortages of supplies, it’s more important than ever before to adequately control your supply chain. You also need to know how to increase your inventory turnover ratio, which equates to steady cash flow.

Inventory Turnover Ratio

Do you really know how well your best product is doing? Is it priced to sell, or is it priced to earn revenue? The inventory turnover ratio compares the cost of the product(s) you’re selling with how long it sat on the shelf. This simple equation is figured by dividing the sales by inventory. A second formula for finding inventory turnover ratio is the cost of goods divided by the average inventory in a fiscal year.

Your business should aim for a turnover ratio between four and six. A score in this range means you’re selling products before they become outdated, out of fashion, or otherwise obsolete. How do you achieve this balance between products in your warehouse and products sold?

Improving Inventory Turnover

You need a warehouse management system that helps with the following aspects of your business:


When you know what your customers want, it’s easier to avoid overstocking inventory. Analyze sales data to forecast what you need to have in stock in order to meet demand.


A system for automatically updating what you have in stock is essential for both brick-and-mortar and online businesses. Real-time analysis of what is selling can aid with accurate forecasting, and identifying restocking needs.

Streamlined Shipping

How often do customers choose a product from a retailer or wholesaler that offers fast shipping, even if it costs a little more? With a customized WMS, you can streamline your shipping process so your customers receive properly packaged products in a timely manner. This turns them into repeat customers and can help you move inventory more efficiently.


When your business is on a roll, it’s important to be monitoring the restocking process. Your WMS should either automatically reorder inventory when products reach a certain threshold, or you should be alerted of what is in need of restocking so you can place your orders accordingly. A good rule of thumb is to have small quantities of a product in stock but to reorder frequently. 

A successful business also needs to focus on a marketing strategy that helps push old or seasonal stock, optimize pricing, and encourage preorders for new products. This will ensure that products aren’t overstocked.

Moving Old Stock

Not every product is going to be a hit, which is why you may need to promote old stock with sales or incentives to increase your inventory turnover ratio. 

Strategic Pricing

Not all of your inventory can be priced based on the same strategy. Some items may cost more to ship than others, and the retail price may need to reflect that if you offer a flat shipping rate. Or, maybe seasonal pricing is necessary to unload old stock, or some items need to be sold in bulk at wholesale prices. Whatever the variables, you need real-time data to accurately price your inventory so it not only sells but turns a profit.


One of the best ways to improve your inventory turnover ratio is to require customers to pre-order an item before you have it in stock. Having those transactions confirmed will inform your purchasing decisions and allow you to order exactly the right quantities. Preorders are popular for seasonal releases, limited-time releases, or the drop of an all-new product that customers have been waiting for.

Inventory Management Solutions from Sequoia

Infor Distribution FACTS – maximizes speed and accuracy while reducing redundancy and the need for manual processes.

CloudSuite Distribution – provides insight across all systems, from supply chain to customers, with seamless integration of other Infor solutions.

Warehouse Management Systems from Sequoia

Tecsys WMS – accelerates warehouse tasks, integrates ERP, CRM, and Flexible workflows, and allows secure access anytime, from anywhere.
If Sequoia Group can help you implement an updated or customized warehouse management system for better inventory management, get in touch with our experts today. You can contact our team online, or reach out via phone at 385-379-6113

Share the Post:

Related Posts

Scroll to Top