- Patrick Muir
- On February 21, 2015
A big problem I’m dealing with is keeping product in-stock.
This past week I ran out of my two bestselling items because I failed to send new inventory in time. The stormy weather back East delayed the arrival of several packages. But the core of the problem is that I never did what’s called “fill the pipe”. In retail and consumer packaged goods you hear the term “pipe” which is simply the amount of inventory shipped and in a distribution center. When launching a new product a manufacturer will often ship a few weeks or months of extra inventory. This moves the replenishment base from zero to several weeks or months of inventory and prevents stock outs.
My strategy is to test a product prior to scaling, so I don’t want to fill the pipeline of inventory until I know it will sell. Now that I have a few SKUs that turn quickly it’s time to fill the pipeline. I’m in the process of shipping large amounts of inventory to Amazon and moving the base from zero to several weeks of inventory. I will then will setup replenishment triggers that give me enough time to send in inventory prior to stocking out.