As online brands grow, it’s not uncommon for inventory to be transferred from one location to another to meet demand.
With multiple fulfillment locations and sales channels, there is a lot of inventory movement that occurs throughout the ecommerce supply chain — especially if you run a multichannel fulfillment operation.
But juggling inventory transfers between storage facilities is sure to leave an inventory management team overwhelmed if not done properly. And though inventory transfers are useful for managing storage and demand, there are ways to avoid them for a more efficient supply chain.
In this article, we dive into what inventory transfers consists of, when it makes sense to initiate a transfer, and how to conduct a smooth transfer to avoid fulfillment delays.
What is an inventory transfer?
An inventory transfer refers to physically relocating inventory from one location to another, whether it’s a rented warehouse, a distribution center, or a fulfillment center operated by a 3PL partner.
Most retailers execute inventory transfers to improve on-hand inventory levels at locations that have high demand, so orders are optimized to reach customers faster and more affordably.
How to transfer inventory in 5 steps
It’s not uncommon for ecommerce businesses to split inventory across multiple fulfillment centers to have a broader, geographical reach.
Even with two warehouse locations, you’re most likely going to have to manage inventory transfers. Fortunately, it’s a simple process that can be done in five steps.
1. Plan your inventory transfer
The first step is to understand when it makes the most sense to conduct an inventory transfer.
Here are some reasons:
- The inventory levels are low or out of stock in a particular location
- A hike in demand is expected at a particular location
- Inventory needs to be moved to sell on a specific channel
- A temporary or permanent warehouse closure
From there, take some time on inventory planning to identify the items and quantities that need to be dispatched, the timeline for the transfer, and build an inventory transfer list.
Compile these details into an inventory transfer request, and have it approved by the inventory manager at the source warehouse if needed.
2. Inventory transfer request
Once the transfer proposal is approved, you need to submit a formal transfer request to the inventory manager at the destination warehouse. If you a rent a warehouse, you are most likely the one in charge of deciding what inventory is stored where.
But in most cases, if you’re managing multiple warehouses, you mostly likely partner with a 3PL. A 3PL will already have a transfer request process for you to follow, so be sure to check in with them first to ensure you have all the necessary paperwork and information needed.
No matter what, you want to make sure there’s enough storage at the other location to meet your request.
Depending on the type of transfer, details to include for a successful inventory transfer might include:
- Source warehouse information
- The destination warehouse
- Item names and SKU numbers
- Unit of measure (UOM)
- Quantities that need to be transferred
- Stock request number
3. Execute transfer
The moment the transfer request receives the green light, the warehousing team at the sending location will check if the items are available. Then, the items are picked, and their serial numbers are scanned using an inventory scanner.
By this stage, the inventory units have been removed from the sending warehouse’s inventory.
Next, the order is packed and shipped to the destination via internal transportation, a shipping carrier, or freight shipping partner.
Order tracking is also enabled to ensure that the goods in transit reach the destination on time.
4. Receive and store product
During warehouse receiving at the destination fulfillment center, the staff will need to cross-check if the delivered goods match the particulars detailed in the delivery slip. This is typical for any warehouse receiving process, whether it’s inventory sent from a supplier or an internal inventory transfer.
The transfer is complete when each item is scanned, a receipt is issued, and the items are properly stowed away.
The warehouse team will store the physical inventory in the bin, shelf, and rack, based on an inventory storage system that suits your business needs.
If your inventory management system is connected to your warehouse management system, you should able to see when inventory is stored and ready to be fulfilled.
5. Always double check
To conduct a successful inventory transfer, inventory visibility is key. Make sure you get confirmation on the following:
- Did the right warehouse location receive items?
- Was the right quantity transferred?
- Were any of the SKUs damaged on receipt?
The best way to check whether the inventory transfer was successful is by tracking the movement and using inventory management software to automate this process.
“I used to have to pull inventory numbers from three places everyday and move all the disparate data into a spreadsheet. ShipBob has an analytics tab in their dashboard with all of this information, which is great for end-of-month reconciliations.
It’s really nice to not have to operate three 3PLs. For inventory planning, I love the SKU velocity report, daily average products sold, and knowing how much inventory we have left and how long it will last. The enhanced visibility is great.”
Wes Brown, Head of Operations at Black Claw LLC
Inventory transfer’s role in the fulfillment process
When an order is placed, having enough inventory at the location closest to the customer is the best-case scenario. This ensures orders are shipped through the fastest, most affordable route.
Having multiple warehouse locations and the ability to transfer inventory enables an agile supply chain. You can sell on multiple channels and expand into more markets across the world while also meeting customer expectations around fast, affordable shipping.
But a business should never rely solely on inventory transfers because the transfer itself can delay the fulfillment process.
Instead, you want to make sure you have visibility into inventory flow across your network, including access to real-time inventory management analytics, so you can track important inventory KPIs and distribute inventory accordingly.
For example, if past historical order data shows that certain items are popular in a specific market or sales channel, you would make sure there is enough stock availability to meet that demand in the right location in the first place.
Establishing a strategic distribution strategy reduces the risk of fulfillment delays, optimizes logistics costs, and ensures orders are fulfilled and shipped efficiently.
“ShipBob’s Inventory Planner integration allows us to have all of our warehouse forecasting and inventory numbers in one platform. We can create ShipBob WROs directly in Inventory Planner and have the inventory levels be reflected in our local shipping warehouse and ShipBob immediately.
It also provides forecasting for each individual ShipBob warehouse, so we know how many units we need to ship each week to cover a certain period and also to not run out of stock.”
Marc Fontanetta, Director of Operations at BAKblade
How ShipBob’s fulfillment network can help save you the work
Managing inventory across multiple locations and sales channels can be time-consuming and complex.
ShipBob makes the process easy by providing you with full visibility into inventory levels throughout your supply chain. ShipBob’s omnichannel fulfillment solution allows you to sell across channels and launch into new markets across the world with ease.
For inventory transfers, all you have to do is follow our simple process found here.
ShipBob’s web-based fulfillment platform offers real-time inventory tracking throughout every stage, so you know what’s incoming, what’s on-hand, and what’s currently being transferred.
Other ShipBob capabilities include:
- DTC fulfillment
- B2B ecommerce
- Kitting and assembly,
- Warehouse picking and packing
- Inventory management
- Returns management
To better manage your inventory, partner with an omnichannel fulfillment provider like ShipBob. Click the button below to request more information today.
Inventory transfer FAQs
Here are answers to the top questions about wholesale inventory transfers.
What is a warehouse transfer?
A warehouse transfer refers to moving inventory from one warehouse to another.
How do you transfer inventory from one warehouse to another?
An inventory transfer from one warehouse to another is often treated like a B2B order. An WRO is filled out and a request is put in to conduct the transfer if you partner with a third-party. Once inventory reaches the warehouse, it goes through a typical warehouse receiving process before items are put away.
What is the difference between transfer order and inventory transfer?
A transfer order is the document that is used to keep track of all inventory transfers. It helps to have these files regularly updated so that warehouse audits are a breeze.
Can ShipBob help transfer inventory?
Yes! ShipBob can transfer inventory from one ShipBob fulfillment center to another, or even ship inventory to another third-party (like Amazon), creating a omnichannel fulfillment solution.