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Zero inventory

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Zero inventory is a business tactic used for maintaining as minimum inventory as possible to reduce  cost of inventory and increasing cash flow. Dropshipping is a very common way to implement zero inventory used by online sellers.

What is zero inventory?

Zero stock is also known as zero inventory. This technique mostly used by manufacturers to improve supply chain efficiency by minimizing inventory as much as possible, by connecting inventory purchases to consumer orders and shipping requests.

A good way to understand how it works is to look at a few examples. Most dropshipping stores do not maintain any inventory and ship orders directly from manufacturers, they directly take orders from visitors (like your Shopify store), connect with the manufacturers or sellers (sometimes you sell directly), and then deliver the items to the customer.

Here, the sellers or stores owner act as middlemen. They tie up with certain suppliers or manufacturers and send their products without stocking them. Konigle's dynamic pricing solution helps dropshipping stores maintain profit margins as cost of goods increase/decrease.

Konigle also has the inventory management tool for Shopify and Shopee stores that help improve profit margins for the stores by helping minimizing dead stock.

Benefits of zero Inventories

Reduced Costs: By reducing carried inventory quantities, you reduce your costs significantly for your online store.

Efficiency: Having items shipped just in time reduces wasted time and energy (efforts).

More Time: zero Inventories provide you some extra time to focus on your store to grow more.

Flexibility: With the help of zero inventory, you have the flexibility to change your item lines quickly.

What is the main risk in zero inventory?

The main two risks in zero inventory are as follows:

1. Delay in Supply Risk

If there is a big distance between your supplier and the actual shipped location, then there is a high risk of delay in delivery and Due to this, you may lose your customer forever. If you don't use zero inventory, then you can deliver without delay.

2. Delay in Production Risk

If you are manufacturing your own items then production may be delayed due to some factors. For example, there is a shortage of laborers or other materials.

Frequently asked questions