Inventory Management for Wholesalers — A Practical Guide

Every wholesaler fights the same two problems at once: running out of the fast sellers, and drowning in the slow ones. Both cost money — one in lost sales, the other in cash tied up on the shelf. Good inventory management is simply the discipline of solving both together.

Know your reorder points

A reorder point is the stock level at which you buy more. Set it too high and cash sits in the warehouse; too low and you stock out mid-week. A workable reorder point comes from three numbers:

• Average daily sales of the item
• Lead time — how long resupply takes
• A small safety buffer for demand spikes

When your system knows these, it can flag what to reorder before you run out, instead of after.

Separate the movers from the dead stock

Not every SKU deserves the same attention. A quick ABC split helps:

• A items — your top sellers. Never stock out; count them often.
• B items — steady movers. Normal reorder rules.
• C items — slow or dead. Reduce, discount, or drop them.

Most distributors find that a fifth of their SKUs drive four-fifths of sales. Manage that fifth well and the numbers move.

Move stock, don't buy it twice

When one branch is out and another is overstocked, a stock transfer beats a new purchase order every time. The key is a system where a transfer is one action that updates both branches' stock instantly — not a phone call and a manual adjustment two days later.

Count what you can't see

Vans and consignment stock are where inventory quietly leaks. Reconcile what leaves on a delivery run against what comes back or gets invoiced. Do it daily, and shrinkage stops being a mystery you discover at year-end.

Bringing it together

Reorder points stop the stockouts. ABC analysis clears the dead stock. Transfers and van reconciliation plug the leaks. None of it requires a bigger warehouse — just a system that shows you the truth in real time.