If you’re interested in growing your e-commerce or small business, you may want to know more about stock transfers in inventory management. Stock transfers can quickly become complex, especially following an expansion, a move to a new location or the addition of a new storage facility.
Let’s look at what a stock transfer is, the types of stock transfers and our tips for making them effectively.
- What Is a Stock Transfer?
- Types of Inventory Management Stock Transfers
- Stock Transfer Tips
- Learn More About Finale Inventory Today
What Is a Stock Transfer?
A stock transfer is the warehouse logistics process of transferring items from one part of a distribution chain to another. The goal of the stock transfer is to optimize your storage capacity, making the inventory handling process faster when the workload is high. There are a few steps involved in a successful inventory transfer:
- Plan for the stock transfer.
- Make a stock transfer request.
- Transfer the items from the source inventory to the destination location.
- Receive the stock at the destination.
- Put away the items in the appropriate locations.
Types of Inventory Management Stock Transfers
You can classify an inventory stock transfer by either location or method, creating four different types of transfers:
- Intra-company transfer: In an intra-company transfer, the stock exchange occurs between two locations within your company. While having only your company involved simplifies the process, careful documentation is still essential to ensure efficiency.
- Inter-company transfer: An inter-company stock transfer transfers inventory between your company and another. This type of warehouse stock transfer involves multiple departments in each company, such as procurement, sales, liaison and logistics. Inter-company transfers can face added complexity due to the different identification codes used by each company.
- One-step process: With this process, you create the receipt and the issue in the same step. You issue the goods to their intended location through just one Stock Transfer Order (STO). While the quantity at the locations changes, the total value of your inventory remains the same. This method is best for intra-company stock transfers and most efficient if the locations are close to each other.
- Two-step process: Your company and another can use a two-step inventory transfer process to track efficiency. Both ends issue the STO document. One warehouse marks the item as in-transit and sends it. When the merchandise reaches its destination, the second warehouse marks the transaction as complete, at which point both locations update their quantity and valuation. This process aids inventory management and tracks the stock transfer’s efficiency.
Stock Transfer Tips
When it comes to managing and transferring your inventory, multiple factors affect the efficiency of the process. The position of the items on the shelves, the layout of the warehouse and the location of the barcodes on the boxes can all affect how effectively the warehouse employees can work with the inventory. Before you get started with a stock transfer, follow the tips below.
1. Manage the Maximum and Minimum Quantities
Reliably tracking maximum and minimum quantities ensures that none of your locations are at risk of under- or overstocking. Set minimum and maximum quantities for each item you have in stock, along with alerts to let you know when you’re running low.
Consider practicing the 80/20 inventory rule that states that 80% of your sales come from 20% of your stock. Identifying which products comprise that 20% will let you prioritize inventory management for those items. You should also have an understanding of these products’ complete sales lifecycles, such as how many items you sell per week or month. Since these are the goods that make you the greatest profit, you should monitor them closely.
Monitoring your top items can get complicated if some products are seasonal bestsellers that hardly move the rest of the year. Investing in an inventory management system will let you track your stock levels across several locations and easily compare them across different spans of time. This software will help you avoid understocking or overstocking an item and better plan your stock transfers.
2. Communicate Effectively Between the Different Warehouses
Miscommunication is a common source of issues in inventory transfers. Effective communications between warehouses ensure that you can track what inventory is being transferred when the items will arrive at different locations and whether any stock was damaged or lost in transit.
You can utilize automation and cloud-based software to improve communications within your company. Automation is essential for managing inventory, helping reduce miscalculation oversights and human error. Cloud-based software syncs across your various locations to ensure scalability and reliable communication. With this software, you can quickly get a complete picture of what, when and how much stock you moved, as well as where that stock is now.
3. Manage Purchase Orders
Whether you have a growing business or a large, established one, strong management skills and the ability to effectively manage multiple purchase orders are essential.
If your business has more than one store location, there may be varying protocols at each. Rules for submitting purchase orders and transferring inventory might differ between locations, keeping you from obtaining a comprehensive view of your inventory levels. That lack of visibility could lead to missing out on bulk deals or overspending. Making a purchase at volume for each of your locations can help you save on overhead, improve inventory control and get a better deal from the supplier.
You can utilize cloud-based inventory management software to streamline the process and make managing purchase orders more efficient. Centralized purchasing will combine separate purchase orders in a single central purchase order, letting you track them all at once.
Learn More About Finale Inventory Today
At Finale Inventory, we offer a highly scalable inventory management system for e-commerce businesses with multichannel warehouses to manage. Our system uses tools like barcode management, integrating with marketplace listings from other websites to simplify inventory organization and accounting.
If your business lacks the proper tools or doesn’t yet track inventory, you may want to invest in our inventory management system. We provide excellent customer service, assigning each new account to a customer relationship manager who is responsible for providing training, consulting and customization. Our consulting and training are free during the trial period, and we include them with every paid play. Contact us at Finale Inventory to learn more about our inventory management system and stock transfer procedures.