{"id":10951,"date":"2023-11-22T15:47:40","date_gmt":"2023-11-22T15:47:40","guid":{"rendered":"https:\/\/www.shipbob.com\/uk\/blog\/fsn-analysis\/"},"modified":"2026-04-30T20:04:13","modified_gmt":"2026-04-30T20:04:13","slug":"fsn-analysis","status":"publish","type":"blog","link":"https:\/\/www.shipbob.com\/uk\/blog\/fsn-analysis\/","title":{"rendered":"Take an Innovative Approach to Inventory Management with FSN Analysis\u00a0"},"content":{"rendered":"\n<div class=\"wp-block-shipbob-blocks-single-toc single-toc\" data-controller=\"blog-toc-controller\" data-action=\"scroll@window-&gt;blog-toc-controller#scrollChanged:passive\" id=\"toc-component\" blog-toc-controller-time-label-value=\"Minutes\" blog-toc-controller-button-label-value=\"Show more\"><div class=\"single-toc-overview\"><p>Table of Contents<\/p><div class=\"single-toc-read-time\"><p>** Minutes<\/p><\/div><\/div>\n<p><a href=\"#h-what-is-fsn-analysis-nbsp\">What is FSN analysis?&nbsp;<\/a><\/p>\n\n\n\n<p><a href=\"#h-how-does-an-fsn-analysis-work-nbsp\">How does an FSN analysis work?&nbsp;<\/a><\/p>\n\n\n\n<p><a href=\"#h-the-pros-and-cons-of-fsn-analysis-nbsp\">The pros and cons of FSN analysis&nbsp;<\/a><\/p>\n\n\n\n<p><a href=\"#h-how-to-calculate-fsn-nbsp\">How to calculate FSN&nbsp;<\/a><\/p>\n\n\n\n<p><a href=\"#h-fsn-analysis-in-action-nbsp\">FSN analysis in action&nbsp;<\/a><\/p>\n\n\n\n<p><a href=\"#h-outsourcing-fulfillment-to-shipbob-levels-up-your-inventory-management-system-nbsp\">Outsourcing fulfilment to ShipBob levels up your inventory management system&nbsp;<\/a><\/p>\n\n\n\n<p><a href=\"#h-fsn-analysis-faqs-nbsp\">FSN analysis FAQs&nbsp;<\/a><\/p>\n<\/div>\n\n\n\n<p>When you run an ecommerce business, you\u2019re primarily concerned with <em>if<\/em> your products sell \u2013 but <em>how<\/em> and <em>when<\/em> they sell are just as important. &nbsp;<\/p>\n\n\n\n<p>Some SKUS will sell out quickly, and barely spend time on shelves. Others won\u2019t sell for a long time, and some will have a sales time somewhere in between. But how do you know which SKUs fall in which category?&nbsp;<\/p>\n\n\n\n<p>You might have a gut feeling or a vague idea of which SKUs are fast-movers and which aren\u2019t \u2013&nbsp;but these senses can be wrong. If you want to make the best and most informed decisions about <a href=\"https:\/\/www.shipbob.com\/blog\/inventory-flow\/\" target=\"_blank\" rel=\"noreferrer noopener\">inventory flow<\/a>, <a href=\"https:\/\/www.shipbob.com\/blog\/inventory-reduction\/\" target=\"_blank\" rel=\"noreferrer noopener\">inventory reduction<\/a>, and assortment planning, you\u2019ll need to collect raw data through an FSN analysis. &nbsp;<\/p>\n\n\n\n<p>In this article, we\u2019ll dive deep into what an FSN analysis is, why it\u2019s important, how it works, and even the pros and cons of conducting one on your own inventory. &nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-fsn-analysis-nbsp\">What is FSN analysis?&nbsp;<\/h2>\n\n\n\n<p>FSN analysis refers to an inventory management technique which divides goods into three categories \u2013 fast-moving, slow-moving, and non-moving \u2013 based on how fast they are used or sold and how long they stay in storage.&nbsp;&nbsp;<\/p>\n\n\n\n<p>By conducting an FSN analysis, ecommerce businesses can easily identify dead stock and prevent it from accumulating. It also allows them to make strategic procurement decisions to save valuable warehousing and storage space, minimise <a href=\"https:\/\/www.shipbob.com\/inventory-kpis\/holding-costs\/\">holding costs<\/a>, and better meet customer demand.&nbsp;&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-does-an-fsn-analysis-work-nbsp\">How does an FSN analysis work?&nbsp;<\/h2>\n\n\n\n<p>In an FSN analysis, a business classifies each of its SKUs into one of three categories:&nbsp;&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Fast-moving inventory \u2013 <\/strong>These SKUs sell quickly and do not remain in stock for long, meaning that they\u2019re also replenished most often. Typically, fast-moving inventory has an <a href=\"https:\/\/www.shipbob.com\/inventory-kpis\/inventory-turnover-ratio\/\" target=\"_blank\" rel=\"noreferrer noopener\">inventory turnover ratio<\/a> of at least 3 and accounts for less than 20% of the total inventory.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Slow-moving inventory \u2013 <\/strong>These SKUs move more slowly through the supply chain and are replenished less often. They generally have an inventory turnover ratio between 1 and 3 and make up about 35% of the total inventory. Some <a href=\"https:\/\/www.shipbob.com\/blog\/surplus-inventory\/\" target=\"_blank\" rel=\"noreferrer noopener\">surplus inventory<\/a> may be included in this category.&nbsp;<\/li>\n\n\n\n<li><strong>Non-moving inventory \u2013 <\/strong>These items rarely move (if at all) and have an inventory turnover ratio below 1. Non-moving inventory can constitute as much as 60-65% of the total inventory. It may include <a href=\"https:\/\/www.shipbob.com\/inventory-kpis\/dead-stock\/\">deadstock<\/a> and other items that are ready for disposal.&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>To determine which products should be included in each category, every SKU is measured on 3 parameters:&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Consumption rate \u2013 <\/strong>The rate at which an item is consumed or expended during a specific period. &nbsp;<\/li>\n\n\n\n<li><strong>Average stay \u2013 <\/strong>The average duration that a specific item stays in the warehouse until it\u2019s sold. &nbsp;&nbsp;<\/li>\n\n\n\n<li><strong>Period of analysis \u2013 <\/strong>The time period for which the analysis is being conducted.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-the-pros-and-cons-of-fsn-analysis-nbsp\">The pros and cons of FSN analysis&nbsp;<\/h2>\n\n\n\n<p>FSN can be a powerful tool for ecommerce merchants, but it might not be a must. To better understand how an FSN analysis can add value to your ecommerce business, consider the following pros and cons.&nbsp;&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-pros-of-fsn-analysis-nbsp\">Pros of FSN analysis&nbsp;<\/h3>\n\n\n\n<p>The biggest draw for FSN analysis is that it reveals which items move through the <a href=\"https:\/\/www.shipbob.com\/blog\/ecommerce-supply-chain\/\" target=\"_blank\" rel=\"noreferrer noopener\">supply chain<\/a> quickly, and which do not. This data is incredibly valuable, as it enables a brand to improve many different aspects of their inventory management, such as:&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-timely-inventory-control-nbsp\">Timely inventory control&nbsp;<\/h4>\n\n\n\n<p>Because an FSN analysis takes every <a href=\"https:\/\/www.shipbob.com\/blog\/how-to-find-sku-number\/\">SKU<\/a> into account, it forces a business to audit their inventory and evaluate their product mix, <a href=\"https:\/\/www.shipbob.com\/blog\/inventory-levels\/\" target=\"_blank\" rel=\"noreferrer noopener\">inventory levels<\/a>, and more. This deeper visibility helps improve your <a href=\"https:\/\/www.shipbob.com\/inventory-management\/inventory-control\/\">inventory control<\/a>, as it gives you the data you need to move deadstock and surplus inventory off your shelves and optimise stock levels.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-better-procurement-planning-nbsp\">Better procurement planning&nbsp;<\/h4>\n\n\n\n<p>When you know how long inventory is likely to stay on shelves before it sells, you are much more equipped to time inventory replenishment. An FSN analysis and its resulting insights enable you to plan procurement to avoid unnecessary purchases while quickly replenishing popular products. This is particularly helpful when navigating seasonal spikes and dips in demand, so that you don\u2019t accidentally end up with more or less stock than you need.&nbsp;&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-improved-warehouse-space-utilization-nbsp\">Improved warehouse space utilisation&nbsp;<\/h4>\n\n\n\n<p>Warehouse space is expensive and usually limited. FSN analyses reveal which items are sitting in storage and taking up space, which in turn allows a merchant to take steps to free up that valuable square footage. This may involve reducing <a href=\"https:\/\/www.shipbob.com\/blog\/economic-order-quantity\/\" target=\"_blank\" rel=\"noreferrer noopener\">order quantities<\/a> or frequencies for those items to prevent further accumulation, or moving them out altogether through heavy discounting, donations, or disposal.&nbsp;&nbsp;<\/p>\n\n\n\n<p>On the other hand, fast-moving inventory can be stored in a more strategic location for easy access. This saves time for pickers and improves warehouse efficiency.&nbsp;&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-increased-profitability-nbsp\">Increased profitability&nbsp;<\/h4>\n\n\n\n<p>Through an FSN analysis, you can improve your <a href=\"https:\/\/www.shipbob.com\/blog\/assortment-planning\/\" target=\"_blank\" rel=\"noreferrer noopener\">assortment planning<\/a> to prioritize fast-moving items and optimise profit margins on those items to boost your bottom line. Similarly, you can identify which slow- or non-moving SKUs are tying up your capital and adjust purchase quantities to improve cash flow and overall profitability.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-effective-cost-reduction-nbsp\">Effective cost reduction&nbsp;<\/h4>\n\n\n\n<p>An FSN can even help you save money. By showing you which SKUs are collecting dust in storage and aren\u2019t reaping any ROI in sales, an FSN empowers you to move those items out and reduce your inventory carrying costs. That way, you\u2019re not spending money on storage, insurance, and depreciation for non-moving items.&nbsp;&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-cons-of-fsn-analysis-nbsp\">Cons of FSN analysis&nbsp;<\/h3>\n\n\n\n<p>Although the FSN analysis offers many benefits, there are a few caveats that you should consider. should be taken into consideration.&nbsp;&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-potential-for-human-error-nbsp\">Potential for human error&nbsp;<\/h4>\n\n\n\n<p>The FSN technique is a form of <a href=\"https:\/\/www.shipbob.com\/blog\/sku-analysis\/\" target=\"_blank\" rel=\"noreferrer noopener\">SKU analysis<\/a> that requires a person to provide their own data and perform formula calculations. This makes it susceptible to human error, which can result in miscalculations and faulty outcomes. Even a small error in the information provided could affect the accuracy of your results, meaning that there\u2019s a higher risk of making decisions based on faulty information.&nbsp;&nbsp;<\/p>\n\n\n\n<p>For instance, you might decide to order more units of a SKU that falls under a non-moving category because you accidentally categorized it as fast-moving. As a result, you\u2019ll end up with excess stock that you can\u2019t really get rid of.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-inconsistency-with-demand-fluctuation-nbsp-nbsp\">Inconsistency with demand fluctuation&nbsp;&nbsp;<\/h4>\n\n\n\n<p>It\u2019s difficult to keep up with sudden or frequent changes in trends using an FSN analysis alone. If you conduct your analysis at a time when a certain SKU is high in demand, it will naturally be categorized as fast-moving. However, if demand suddenly drops again by the time your replenishment inventory arrives, you\u2019ll end up with a bunch of excess stock that\u2019s difficult to sell.&nbsp;&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-to-calculate-fsn-nbsp\">How to calculate FSN&nbsp;<\/h2>\n\n\n\n<p>The FSN calculation process is complicated, and involves several formulae. Follow this step-by-step method to calculate FSN for your inventory. &nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-step-1-calculate-consumption-rate-for-each-sku-nbsp\">Step 1: Calculate consumption rate for each SKU.&nbsp;<\/h3>\n\n\n\n<p>Start by making an itemized list of every SKU in your inventory. Next, calculate the consumption rate for each product. &nbsp;<\/p>\n\n\n\n<p>To calculate this, you\u2019ll need to use this formula:&nbsp;<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-style-blog is-layout-flow wp-block-quote-is-layout-flow\">\n<p>Consumption rate = Total number of issued goods \/ Total period&nbsp;<\/p>\n<\/blockquote>\n\n\n\n<p>For example, say the total number of issued goods for a certain pair of pants is 150 and the total period is 15 days. In this case, the consumption rate would be as follows.&nbsp;<\/p>\n\n\n\n<p class=\"is-style-indent\">Consumption rate = 150 \/ 15 &nbsp;<\/p>\n\n\n\n<p class=\"is-style-indent\">Consumption rate = 10&nbsp;<\/p>\n\n\n\n<p>Here, the consumption rate for this specific pair of pants is 10 units.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-step-2-calculate-the-average-stay-for-each-sku-nbsp-nbsp-nbsp\">Step 2: Calculate the average stay for each SKU.&nbsp;&nbsp;&nbsp;<\/h3>\n\n\n\n<p>Next, calculate the&nbsp;average stay for each product. &nbsp;<\/p>\n\n\n\n<p>To calculate this, you\u2019ll need to use this formula:&nbsp;<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-style-blog is-layout-flow wp-block-quote-is-layout-flow\">\n<p>Average stay = Cumulative number of days inventory is held \/ (Total number of goods received + Opening balance)&nbsp;<\/p>\n<\/blockquote>\n\n\n\n<p>For example, say another pair of pants is held for a cumulative of 60 days and there were 20 units received with an opening balance of 10. In this case, the average stay for this pair of pants would be as follows.&nbsp;<\/p>\n\n\n\n<p class=\"is-style-indent\">Average stay = 60 \/ (20+10) &nbsp;<\/p>\n\n\n\n<p class=\"is-style-indent\">Average stay = 60 \/ 30 &nbsp;<\/p>\n\n\n\n<p class=\"is-style-indent\">Average stay = 2&nbsp;<\/p>\n\n\n\n<p>That means the average stay for this pair of pants is 2.&nbsp;&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-step-3-calculate-the-cumulatives-for-both-parameters-nbsp\">Step 3: Calculate the cumulatives for both parameters.&nbsp;<\/h3>\n\n\n\n<p>Once you have these numbers, you\u2019ll need to calculate the cumulative consumption rate and cumulative average stay for each item.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-cumulative-consumption-rate-nbsp\">Cumulative consumption rate&nbsp;<\/h4>\n\n\n\n<blockquote class=\"wp-block-quote is-style-blog is-layout-flow wp-block-quote-is-layout-flow\">\n<p>Cumulative consumption rate = Item consumption rate + Sum of consumption rates for all items consumed faster than the item in question&nbsp;<\/p>\n<\/blockquote>\n\n\n\n<p>For example, say the consumption rate of a certain handbag is 9, but 3 different inventory items have higher consumption rates: 12, 15, and 16 respectively. In this case, the cumulative consumption rate can be calculated as:&nbsp;<\/p>\n\n\n\n<p class=\"is-style-indent\">Cumulative consumption rate =&nbsp;9 + (12+15+16)&nbsp;&nbsp;<\/p>\n\n\n\n<p class=\"is-style-indent\">Cumulative consumption rate = 9&nbsp;+ 43&nbsp;<\/p>\n\n\n\n<p class=\"is-style-indent\">Cumulative consumption rate = 52&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-cumulative-average-stay-nbsp\">Cumulative average stay&nbsp;<\/h4>\n\n\n\n<blockquote class=\"wp-block-quote is-style-blog is-layout-flow wp-block-quote-is-layout-flow\">\n<p>Cumulative average stay = Item average stay +&nbsp;Sum of the average stays of all items staying longer in the inventory than the item in question&nbsp;<\/p>\n<\/blockquote>\n\n\n\n<p>For example, say the average stay of a certain pair of shoes is 10 days, and the sum of the average stay of all items with longer average stay times&nbsp;is 25. In this case, the cumulative average stay can be represented in percentage as follows:&nbsp;<\/p>\n\n\n\n<p class=\"is-style-indent\"><em><\/em> Cumulative average stay = 10+ 25&nbsp;<\/p>\n\n\n\n<p class=\"is-style-indent\">Cumulative average stay = 35&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-step-4-calculate-the-percentages-for-both-cumulatives-nbsp\">Step 4: Calculate the percentages for both cumulatives.&nbsp;<\/h3>\n\n\n\n<p>Next, calculate the percentages of both cumulative consumption rate and cumulative average stay for every SKU using two more equations.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-percentage-cumulative-consumption-rate-nbsp\">Percentage cumulative consumption rate&nbsp;<\/h4>\n\n\n\n<blockquote class=\"wp-block-quote is-style-blog is-layout-flow wp-block-quote-is-layout-flow\">\n<p>Percentage cumulative consumption rate = (Cumulative consumption rate of item \/&nbsp;Cumulative consumption rate of all items) x 100&nbsp;<\/p>\n<\/blockquote>\n\n\n\n<p>For example, say the cumulative consumption rate of a certain handbag is 10, and the cumulative consumption rate of all items is 8. In this case, the percentage cumulative consumption rate can be&nbsp;calculated as follows:&nbsp;<\/p>\n\n\n\n<p class=\"is-style-indent\">Percentage cumulative consumption rate = (10 \/&nbsp;8) x 100 &nbsp;<\/p>\n\n\n\n<p class=\"is-style-indent\">Percentage cumulative consumption rate = 1.25 x 100 &nbsp;<\/p>\n\n\n\n<p class=\"is-style-indent\">Percentage cumulative consumption rate = 125%&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-percentage-cumulative-average-stay-nbsp-nbsp\">Percentage cumulative average stay&nbsp;&nbsp;<\/h4>\n\n\n\n<blockquote class=\"wp-block-quote is-style-blog is-layout-flow wp-block-quote-is-layout-flow\">\n<p>Percentage cumulative average stay = (Cumulative average stay of item \/ Cumulative average stay of all items) x 100&nbsp;<\/p>\n<\/blockquote>\n\n\n\n<p>For example, say the cumulative average stay of a certain pair of shoes is 10 days and the cumulative average stay of all items is 25. In this case, the percentage cumulative average stay can be&nbsp;calculated as follows:&nbsp;<\/p>\n\n\n\n<p class=\"is-style-indent\">Percentage cumulative average stay = (10 \/ 25) x 100 &nbsp;<\/p>\n\n\n\n<p class=\"is-style-indent\">Percentage cumulative average stay = 0.4 x 100 &nbsp;<\/p>\n\n\n\n<p class=\"is-style-indent\">Percentage cumulative average stay = 40%&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-step-5-create-tables-ranking-skus-by-each-percentage-nbsp\">Step 5: Create tables ranking SKUS by each percentage. &nbsp;<\/h3>\n\n\n\n<p>Next, it\u2019s time to organise the items based on their percentage cumulative consumption rates and percentage cumulative average stay.&nbsp;<\/p>\n\n\n\n<p>In one table, list&nbsp;all SKUs based on percentage cumulative consumption rate. Arrange them in ascending order of consumption, with the highest percentage of consumption at the bottom. &nbsp;<\/p>\n\n\n\n<p>You will them classify each item based on its ranking:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Top 70% of the list = fast-moving items (F)&nbsp;<\/li>\n\n\n\n<li>Middle 20% of the list = slow-moving items (S)&nbsp;<\/li>\n\n\n\n<li>Bottom 10% of the list = non-moving items (N)&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>In another table, list all SKUs based on percentage cumulative average stay. Arrange them in descending order, placing items with the highest average stays at the top.&nbsp; &nbsp;<\/p>\n\n\n\n<p>You will them classify each item based on its ranking:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Top 70% of the list = non-moving items (N)&nbsp;<\/li>\n\n\n\n<li>Middle 20% of the list = slow-moving items (S)&nbsp;<\/li>\n\n\n\n<li>Bottom 10% of the list = fast-moving items (F)&nbsp;<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-step-6-combine-results-to-finalize-fsn-classifications-nbsp\">Step 6: Combine results to finalize FSN classifications.&nbsp;<\/h3>\n\n\n\n<p>Finally, it\u2019s time to combine the two tables\u2019 rankings and finalize your classification. Here\u2019s how you can classify your inventory into three categories:&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\">Consumption rate ranking&nbsp;<\/td><td class=\"has-text-align-center\" data-align=\"center\">Average stay ranking&nbsp;<\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong>Final ranking<\/strong>&nbsp;<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">F&nbsp;<\/td><td class=\"has-text-align-center\" data-align=\"center\">F&nbsp;<\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong>F<\/strong>&nbsp;<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">F&nbsp;<\/td><td class=\"has-text-align-center\" data-align=\"center\">S&nbsp;<\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong>F<\/strong>&nbsp;<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">F&nbsp;<\/td><td class=\"has-text-align-center\" data-align=\"center\">N&nbsp;<\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong>S<\/strong>&nbsp;<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">S&nbsp;<\/td><td class=\"has-text-align-center\" data-align=\"center\">F&nbsp;<\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong>S<\/strong>&nbsp;<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">S&nbsp;<\/td><td class=\"has-text-align-center\" data-align=\"center\">S&nbsp;<\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong>S<\/strong>&nbsp;<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">S&nbsp;<\/td><td class=\"has-text-align-center\" data-align=\"center\">N&nbsp;<\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong>N<\/strong>&nbsp;<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">N&nbsp;<\/td><td class=\"has-text-align-center\" data-align=\"center\">F&nbsp;<\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong>N<\/strong>&nbsp;<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">N&nbsp;<\/td><td class=\"has-text-align-center\" data-align=\"center\">S&nbsp;<\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong>N<\/strong>&nbsp;<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">N&nbsp;<\/td><td class=\"has-text-align-center\" data-align=\"center\">N&nbsp;<\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong>N<\/strong>&nbsp;<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-fsn-analysis-in-action-nbsp\">FSN analysis in action&nbsp;<\/h2>\n\n\n\n<p>To get a better sense of how an FNS analysis can add value to ecommerce operations, let\u2019s take a look at a few scenarios where it can be used.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-fsn-analysis-for-stock-control-nbsp\">FSN analysis for stock control&nbsp;<\/h3>\n\n\n\n<p>In this scenario, a business has large volumes of unsold inventory that is no longer in demand and taking up valuable space in the warehouse. This prevents the business from procuring more inventory that could generate sales for them. &nbsp;<\/p>\n\n\n\n<p>The business performs an FSN analysis to identify the items that are no longer moving. The process helps them to identify all the SKUs that are considered non-moving, and with that data, the business is able to:&nbsp;&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Prevent additional purchases of those non-moving items.&nbsp;<\/li>\n\n\n\n<li>Optimise cash flow.&nbsp;<\/li>\n\n\n\n<li>Free up space to make room for more inventory that could generate sales.&nbsp;<\/li>\n\n\n\n<li>Focus on procuring more items that could get sold quickly and generate revenue.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-fsn-analysis-for-optimized-warehouse-layout-nbsp\">FSN analysis for optimised warehouse layout&nbsp;<\/h3>\n\n\n\n<p>In this scenario, a business is struggling with low pick rates because pickers have to travel long distances within the warehouse to retrieve fast-selling goods. The brand decides to conduct an FSN analysis to see how they can better arrange their inventory to reduce transit time. As they identify the fast-moving goods, they arrange them closer to loading areas, so pickers no longer have to travel long distances to retrieve them. This allows them to:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Pick these fast-moving products more quickly, thus improving their pick rates.&nbsp;<\/li>\n\n\n\n<li>Minimise travel time, which improves picking efficiency.&nbsp;<\/li>\n\n\n\n<li>Quickly move these fast-moving products from storage to packing, which speeds up the fulfilment process.&nbsp;<\/li>\n\n\n\n<li>Ship out orders quickly, preventing fulfilment delays and increasing on-time shipments.&nbsp;<\/li>\n\n\n\n<li>Fulfil more orders in a day.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-outsourcing-fulfillment-to-shipbob-levels-up-your-inventory-management-system-nbsp\">Outsourcing fulfilment to ShipBob levels up your inventory management system&nbsp;<\/h2>\n\n\n\n<p>Confused by FSN? Don\u2019t feel bad \u2013 while this analysis is a great tool to help a merchant understand inventory flow, it can be very hard to master, time-consuming, and&nbsp;tedious to continuously repeat. &nbsp;<\/p>\n\n\n\n<p>Luckily, there are other ways of monitoring <a href=\"https:\/\/www.shipbob.com\/blog\/inventory-movement\/\">inventory movement<\/a>, and other tools for achieving inventory visibility. &nbsp;<\/p>\n\n\n\n<p>Partnering with an expert ecommerce enablement platform like ShipBob, for example, enables brands to manage their inventory and balance stock levels from one place, with automatic, real-time analytics for easy insights. &nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-outsourced-inventory-management-nbsp\">Outsourced inventory management&nbsp;<\/h3>\n\n\n\n<p>When you outsource fulfilment to ShipBob, you hand off your inventory to a team of experts who can streamline the inventory management process for you. &nbsp;<\/p>\n\n\n\n<p>ShipBob will receive and store your inventory across our fulfilment network, leveraging best practices to minimise waste and optimise for cost. This includes:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Separating inventory based on expiration date and <a href=\"https:\/\/support.shipbob.com\/s\/article\/Lot-Products-in-the-Product-Catalog\/\">lot numbers<\/a> to reduce the risk of inventory <a href=\"https:\/\/www.shipbob.com\/blog\/obsolete-inventory\/\">obsoletion<\/a> and deadstock.&nbsp;<\/li>\n\n\n\n<li>Using the <a href=\"https:\/\/www.shipbob.com\/blog\/fifo\/\" target=\"_blank\" rel=\"noreferrer noopener\">FIFO<\/a> method to keep inventory moving through your supply chain.&nbsp;<\/li>\n\n\n\n<li>Real-time reorder notifications that alert a merchant when a SKU needs to be replenished.&nbsp;<\/li>\n\n\n\n<li>Leverages <a href=\"https:\/\/support.shipbob.com\/s\/article\/Order-Allocation-at-ShipBob\/\">order allocation<\/a> logic to ensure that orders are fulfilled using inventory from the most optimal fulfilment centre, based on costs, inventory availability, and proximity. &nbsp;<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-real-time-inventory-visibility-nbsp\">Real-time inventory visibility&nbsp;<\/h3>\n\n\n\n<p>Even though ShipBob stores your inventory for you, our proprietary software gives you deep <a href=\"https:\/\/www.shipbob.com\/inventory-management\/inventory-visibility\/\" target=\"_blank\" rel=\"noreferrer noopener\">inventory visibility<\/a> at all times. Real-time <a href=\"https:\/\/www.shipbob.com\/inventory-management\/inventory-tracking\/\">inventory tracking<\/a> and updates let you know where your inventory is at all times and how much&nbsp;inventory is left, ensuring that you get an accurate picture of your inventory levels. &nbsp;<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" height=\"321\" width=\"700\" src=\"https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/11\/78805a221a988e79ef3f42d7c5bfd418-6-700x321.jpeg?w=1280px\" alt=\"\" class=\"wp-image-10955\" data-responsive-img srcset=\"https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/11\/78805a221a988e79ef3f42d7c5bfd418-6-700x321.jpeg?w=700px 650w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/11\/78805a221a988e79ef3f42d7c5bfd418-6-700x321.jpeg?w=860px 768w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/11\/78805a221a988e79ef3f42d7c5bfd418-6-700x321.jpeg?w=1180px 1080w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/11\/78805a221a988e79ef3f42d7c5bfd418-6-700x321.jpeg?w=1400px 1280w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/11\/78805a221a988e79ef3f42d7c5bfd418-6-700x321.jpeg?w=1600px 1440w\" fetchpriority=\"low\" \/><\/figure>\n<\/div>\n\n\n<p>That way, you can plan your procurement accordingly so that you never stock out of even your fastest-moving items. &nbsp;<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-style-blog is-layout-flow wp-block-quote-is-layout-flow\">\n<p><em>\u201cShipBob has given us increased visibility thanks to the dashboard that allows us to easily manage stock and orders. That wasn\u2019t possible for us before. Our relationship with ShipBob has been a game-changer for Quadrant, and it\u2019s made my life so much easier. ShipBob is incredibly easy to use \u2013 that\u2019s my favorite part about it.\u201d<\/em><\/p>\n\n\n\n<p>Will Kerr, Apparel Lead at <a href=\"https:\/\/www.shipbob.com\/blog\/category\/case-studies\/\">Quadrant<\/a>&nbsp;<\/p>\n<\/blockquote>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-improved-inventory-analysis-nbsp\">Improved inventory analysis&nbsp;<\/h3>\n\n\n\n<p>The ShipBob dashboard comes with powerful <a href=\"https:\/\/www.shipbob.com\/inventory-kpis\/inventory-analytics\/\">analytics<\/a> so you can monitor your inventory data and make informed decisions. It helps you keep track of vital <a href=\"https:\/\/www.shipbob.com\/inventory-kpis\/\" target=\"_blank\" rel=\"noreferrer noopener\">inventory management KPIs<\/a> at the SKU level, including inventory turnover and SKU velocity.&nbsp;<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" height=\"314\" width=\"700\" src=\"https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/11\/78805a221a988e79ef3f42d7c5bfd418-7-700x314.png?w=1280px\" alt=\"\" class=\"wp-image-10954\" data-responsive-img srcset=\"https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/11\/78805a221a988e79ef3f42d7c5bfd418-7-700x314.png?w=700px 650w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/11\/78805a221a988e79ef3f42d7c5bfd418-7-700x314.png?w=860px 768w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/11\/78805a221a988e79ef3f42d7c5bfd418-7-700x314.png?w=1180px 1080w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/11\/78805a221a988e79ef3f42d7c5bfd418-7-700x314.png?w=1400px 1280w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/11\/78805a221a988e79ef3f42d7c5bfd418-7-700x314.png?w=1600px 1440w\" fetchpriority=\"low\" \/><\/figure>\n<\/div>\n\n\n<p>From a single dashboard, you can quicky gather vital information to produce more accurate, more timely insights \u2013 insights which you can use to improve your inventory management as a whole.&nbsp;<\/p>\n\n\n\n<p>For more information on how ShipBob can improve your brand\u2019s inventory management, click the button below. &nbsp;<\/p>\n\n\n\n<div class=\"wp-block-buttons is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-16018d1d wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/www.shipbob.com\/quote\/\">Request a Quote<\/a><\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-fsn-analysis-faqs-nbsp\">FSN analysis FAQs&nbsp;<\/h2>\n\n\n\n<p>Below are answers to common questions about FSN analysis.<\/p>\n\n\n\n<div class=\"wp-block-shipbob-blocks-single-faq single-faq direction-col\" data-controller=\"faq-controller\" data-faq-controller-open-value=\"true\"><div class=\"single-faq-title-contianer\"><h4 class=\"single-faq-title\">What is FSN analysis and how is it used in inventory management?&nbsp;<\/h4><div class=\"single-faq-expand\" data-faq-controller-target=\"expand\"><img decoding=\"async\" src=\"\/wp-content\/themes\/shipbob-2022\/resources\/svg\/plus-solid.svg\"><\/div><\/div><div class=\"single-faq-childs\" data-faq-controller-target=\"answer\"><div>\n\n<p>An FSN analysis is an inventory analysis technique where goods are categorized based on how quickly they&rsquo;re consumed. It&rsquo;s an effective method for identifying dead stock for inventory reduction and fast-selling items for procurement planning.&nbsp;&nbsp;<\/p>\n\n<\/div><\/div><\/div>\n\n\n\n<div class=\"wp-block-shipbob-blocks-single-faq single-faq direction-col\" data-controller=\"faq-controller\" data-faq-controller-open-value=\"true\"><div class=\"single-faq-title-contianer\"><h4 class=\"single-faq-title\">How does FSN analysis categorize inventory items?&nbsp;<\/h4><div class=\"single-faq-expand\" data-faq-controller-target=\"expand\"><img decoding=\"async\" src=\"\/wp-content\/themes\/shipbob-2022\/resources\/svg\/plus-solid.svg\"><\/div><\/div><div class=\"single-faq-childs\" data-faq-controller-target=\"answer\"><div>\n\n<p>An FSN analysis categorizes inventory items according to three levels of consumption &ndash; fast-moving, slow-moving, and non-moving.&nbsp;<\/p>\n\n<\/div><\/div><\/div>\n\n\n\n<div class=\"wp-block-shipbob-blocks-single-faq single-faq direction-col\" data-controller=\"faq-controller\" data-faq-controller-open-value=\"true\"><div class=\"single-faq-title-contianer\"><h4 class=\"single-faq-title\">What are the key factors considered in FSN analysis?&nbsp;<\/h4><div class=\"single-faq-expand\" data-faq-controller-target=\"expand\"><img decoding=\"async\" src=\"\/wp-content\/themes\/shipbob-2022\/resources\/svg\/plus-solid.svg\"><\/div><\/div><div class=\"single-faq-childs\" data-faq-controller-target=\"answer\"><div>\n\n<p>Average stay and consumption rate are the main factors considered in FSN analysis.&nbsp;<\/p>\n\n<\/div><\/div><\/div>\n\n\n\n<div class=\"wp-block-shipbob-blocks-single-faq single-faq direction-col\" data-controller=\"faq-controller\" data-faq-controller-open-value=\"true\"><div class=\"single-faq-title-contianer\"><h4 class=\"single-faq-title\">Can ShipBob&rsquo;s inventory dashboards help with FSN analysis?&nbsp;<\/h4><div class=\"single-faq-expand\" data-faq-controller-target=\"expand\"><img decoding=\"async\" src=\"\/wp-content\/themes\/shipbob-2022\/resources\/svg\/plus-solid.svg\"><\/div><\/div><div class=\"single-faq-childs\" data-faq-controller-target=\"answer\"><div>\n\n<p>Yes, ShipBob&rsquo;s <a href=\"https:\/\/www.shipbob.com\/inventory-management\/software\/\" target=\"_blank\" rel=\"noreferrer noopener\">inventory management software<\/a> provides you with accurate and up-to-date inventory data, which can be used for conducting FSN analysis.&nbsp;&nbsp;<\/p>\n\n<\/div><\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Learn how to conduct an FSN analysis for your inventory with this step-by-step guide, plus the pros and cons of doing so.  <\/p>\n","protected":false},"author":194,"featured_media":23171,"parent":0,"template":"","meta":{"content-type":"","inline_featured_image":false,"footnotes":""},"blogcategories":[8],"class_list":["post-10951","blog","type-blog","status-publish","has-post-thumbnail","hentry","blogcategories-inventory"],"yoast_head":"<!-- This site is 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