What is Order fill rate in Inventory management and why should you care about it?
If you Manage a wholesale business, you are already aware of the metric “Order Fill Rate.” It is crucial to know the basics and other details of such metrics so that your business’s success is measured efficiently. Also, you should have them in place. When wholesale business is concerned, the order fill rate metrics is one of the metrics that allow you to take your business forward. Knowing the fill rate is vital for wholesalers to have enough stock available to fulfill the requirements of their customers.
A common question is often asked, what does fill rate represent? In general, the fill rate is often referred to as a percentage of the orders received that are shipped in full. The first shipments are usually dispatched on time and are considered as a percentage of all orders. Fill rate is also used to measure the quality of your service. It depicts how well the customers are serviced. The entire inventory management process has a strong pillar, which is the order fill rate.
Order Fill Rate
Taking several things into account, the order fill rate is an essential metric that significantly impacts the relationship that wholesalers share with retailers. Every business aims to achieve 100 percent success. When a wholesaler can manage a high fill rate, retailers choose them over others. They know that they will get the required stock from you. Parallel to it, the trust of a company enhances, hence, giving rise to new opportunities in the future.
Order fill rate is crucial and much more critical when the sale success of a wholesale business is measured. There are a few other metrics that are vital for the wholesalers to know. It includes Order to Cash, Inventory Turn, Visit to Order time, Order throughout time, etc.
All in all, to sum up in a better way, order to fill rates help consumers get what they want at any point in time.
Understanding Fill Rate
Wholesalers should have leverage over their competition. They have data related to real-time inventory. By utilizing this, they can analyze and understand unique ways to enjoy several advantages that other wholesalers cannot.
With the help of inventory management software and automation, wholesalers can have real-time data to help them take immediate decisions. They prompt, then you have low stock or out. They can also check if their orders will be delivered on time, or they will face delays. It can also impact a decision taken between a wholesaler and a retailer. Moreover, businesses must have real-time results so that they can make the right choices.
Additional Sales Cycles
Retailers don’t have much patience to wait for another sales cycle to take place. If you are a wholesaler, and your order is delayed due to some reason, they don’t want the hassle of waiting or re-ordering. They simply move to another seller. Hence, you should fix your order rates at the earliest if you don’t want to lose customers in the future.
There are other reasons why a wholesaler should have efficient inventory management in place.
There are times when demand exceeds expectations, and the retailers demand new products. What if the wholesaler is not ready with something new or has not yet manufactured it? They will lose this order since they have the same thing to offer every time. Hence, instead of losing an order, you can provide other products to the retailers. It is smart for wholesalers to have stock ready for other products, so they are readily shipped.
Shelves Always Full
Retailers like to keep their stock updated and shelves full. They want the products to keep turning. For this, retailers have to plan several aspects, and all such things take place behind the scenes. Wholesalers must meet the goals of retailers; they might not place an order again for the next time. Wholesalers maintain open communications with retailers. As a wholesaler, you should always meet the retailers’ expectations and assist them in planning.
Inventory Software, Automation, and Sales Order Management Software are a few tools that make wholesalers capable of accessing real-time data. Real-time data is vital to make necessary decisions. High-level management is possible with things in place.
This is Sharon Winget, Staff Writer with GoodFirms, a review and rating platform of top IT companies & software. A tech geek at heart, I firmly believe technology can transform societies. I enjoy blogging about web design, email marketing, and content marketing.