{"id":193,"date":"2021-04-30T12:01:14","date_gmt":"2021-04-30T12:01:14","guid":{"rendered":"https:\/\/www.shipbob.com\/uk\/blog\/buffer-inventory\/"},"modified":"2025-09-26T17:11:32","modified_gmt":"2025-09-26T17:11:32","slug":"buffer-inventory","status":"publish","type":"blog","link":"https:\/\/www.shipbob.com\/uk\/blog\/buffer-inventory\/","title":{"rendered":"Buffer Inventory: How It Can Make Or Break A Business"},"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\"><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-buffer-inventory\">What is buffer inventory?<\/a><\/p>\n\n\n\n<p><a href=\"#h-why-you-need-to-keep-buffer-inventory\">Why you need to keep buffer inventory<\/a><\/p>\n\n\n\n<p><a href=\"#h-how-to-calculate-buffer-inventory-levels\">How to calculate buffer inventory levels<\/a><\/p>\n\n\n\n<p><a href=\"#h-simplifying-your-inventory-management\">Simplifying your inventory management<\/a><\/p>\n\n\n\n<p><a href=\"#h-improve-inventory-management-with-shipbob-s-wms\">Improve inventory management with ShipBob&#8217;s WMS<\/a><\/p>\n\n\n\n<p><a href=\"#h-buffer-inventory-faqs\">Buffer inventory FAQs<\/a><\/p>\n\n\n\n<p><a href=\"#\"><\/a><\/p>\n<\/div>\n\n\n\n<p><span>A buffer acts as a cushion to absorb the impact of potential harm.&nbsp;<\/span><\/p>\n\n\n\n<p><span>For ecommerce businesses, having a buffer in inventory levels helps prevent shortages and delays in the <a href=\"https:\/\/www.shipbob.com\/blog\/retail-fulfillment\/\">retail fulfilment<\/a> process. But ordering too much inventory can quickly cut into profit margins and increase <\/span><a href=\"https:\/\/www.shipbob.com\/inventory-kpis\/holding-costs\/\"><span>holding costs<\/span><\/a><span>.&nbsp;<\/span><\/p>\n\n\n\n<p><span>Calculating the \u2018right\u2019 buffer inventory levels (above the cycle stock) brings greater certainty of supply while being resourceful.&nbsp;<\/span><\/p>\n\n\n\n<p><span>There are several ways to determine a healthy level of buffer stock, but it will require you to have access to historical inventory and order data and other tools to help you find the optimal amount of inventory buffer to order.<\/span><\/p>\n\n\n\n<p><span>In this article, you will learn:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span>The advantages of having buffer inventory<\/span><\/li>\n\n\n\n<li><span>Different ways to calculate the right amount<\/span><\/li>\n\n\n\n<li><span>How a third-party logistics (<\/span><a href=\"https:\/\/www.shipbob.com\/3pl\/\"><span>3PLs<\/span><\/a><span>) partner like ShipBob can help you <a href=\"https:\/\/www.shipbob.com\/blog\/supply-chain-optimization\/\">optimise your supply chain<\/a><\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-buffer-inventory\">What is buffer inventory?<\/h2>\n\n\n\n<p><span>Buffer inventory (also known as safety stock, supply chain safety net, or contingency stock) refers to a <a href=\"https:\/\/www.shipbob.com\/blog\/surplus-inventory\/\">surplus of inventory<\/a> that is stored in a warehouse in case of an emergency, supply chain failure, transportation delays, or an unexpected surge in demand.&nbsp;<\/span><\/p>\n\n\n\n<p><span>The amount of buffer inventory you decide to store can be based on the type of product(s) you sell, average <\/span><a href=\"https:\/\/www.shipbob.com\/blog\/how-to-cut-costs-and-production-lead-times\/\"><span>production lead times<\/span><\/a><span>, and historical inventory and order trends.<\/span><\/p>\n\n\n\n<p><span> Sometimes, changes in demand can be predicted, such as running <a href=\"https:\/\/www.shipbob.com\/blog\/how-to-run-an-e-commerce-flash-sale\/\">flash sales<\/a> or other types of planned promotions. Other times, a business might see an influx in sales due to a sudden change in demand or market shortage (e.g., hand sanitizer during the COVID-19 pandemic).&nbsp;<\/span><\/p>\n\n\n\n<p><span>Even if you don\u2019t predict a higher volume of orders in the near future, having a \u201cbuffer\u201d in how much inventory you have available to meet demand provides peace of mind, as both your supply chain and the market can be unpredictable&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-buffer-inventory-vs-safety-stock\">Buffer inventory vs. safety stock<\/h3>\n\n\n\n<p><span>The terms \u2018buffer inventory\u2019 and \u2018safety stock\u2019 are used interchangeably, referring to the extra stock that an ecommerce business has on hand to act as a cushion for uncertainties in supply and demand.&nbsp;<\/span><\/p>\n\n\n\n<p><span>In some cases, \u2018buffer inventory\u2019 refers to inventory held specifically for unexpected increase in product demand (e.g., a promotion that brings in more sales than expected), and \u2018safety stock\u2019 refers to inventory held in case of <\/span><a href=\"https:\/\/www.shipbob.com\/blog\/work-in-process-inventory\/\"><span>work-in-process inventory<\/span><\/a><span> or supplier delays (e.g., manufacturing shutdown).&nbsp;<\/span><\/p>\n\n\n\n<p><span>Overall, they serve the same purpose: to ensure there is enough inventory to meet demand and fulfil orders on time.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-why-you-need-to-keep-buffer-inventory\">Why you need to keep buffer inventory<\/h2>\n\n\n\n<p><span>Higher than expected sales is great, but running out of <\/span><a href=\"https:\/\/www.shipbob.com\/ecommerce-inventory\/\"><span>ecommerce inventory<\/span><\/a><span> is never good for business. Even if your business takes the time to forecast demand, <\/span><a href=\"https:\/\/www.shipbob.com\/inventory-management\/inventory-forecasting\/\"><span>inventory forecasting<\/span><\/a><span> is never 100% accurate and so much can happen throughout the supply chain.&nbsp;<\/span><\/p>\n\n\n\n<p><span>Keeping buffer inventory is a great way to reduce <\/span><a href=\"https:\/\/www.shipbob.com\/inventory-kpis\/stockout-costs\/\"><span>stockout costs<\/span><\/a><span> and avoid delays in <\/span><a href=\"https:\/\/www.shipbob.com\/blog\/order-fulfillment\/\"><span>order fulfilment<\/span><\/a><span> and shipping. Think of it as a contingency plan: preparing for the unexpected.<\/span><\/p>\n\n\n\n<p><span>This even helped many <\/span><a href=\"https:\/\/www.shipbob.com\/blog\/direct-to-consumer-brands-and-3pl\/\"><span>direct-to-consumer (DTC) brands<\/span><\/a><span> meet customer expectations during the start and continuation of the pandemic.&nbsp;<\/span><\/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>\u201cWe were already growing quickly when COVID began, then we completely sold out the first week of the pandemic. <\/em><\/p>\n\n\n\n<p><em>In three weeks, more than 34,000 customers were waitlisted on Touchland.com. We even did pre-orders to try and meet demand. <\/em><\/p>\n\n\n\n<p><em>Between March and May 2020, we had up to 700 orders per day and sold 10,000 dispensers to industry-leading brands in those three months.\u201d<\/em><\/p>\n\n\n\n<p>Andrea Lisbona, Founder &amp; CEO of <a href=\"https:\/\/www.shipbob.com\/blog\/touchland\/\">Touchland<\/a><\/p>\n<\/blockquote>\n\n\n\n<p><span>To calculate the right amount of buffer stock to have on hand, you will need to implement an inventory management system that tracks inventory and demand over time (and also ensures <\/span><a href=\"https:\/\/www.shipbob.com\/inventory-kpis\/inventory-accuracy\/\"><span>inventory accuracy<\/span><\/a>)<span>. <\/span><\/p>\n\n\n\n<p><span>With an <a href=\"https:\/\/www.shipbob.com\/inventory-management\/inventory-tracking\/\">inventory tracking<\/a> system, you also can set <\/span><a href=\"https:\/\/www.shipbob.com\/blog\/reorder-point-formula\/\"><span>reorder points<\/span><\/a><span> so you know when it\u2019s time to <a href=\"https:\/\/www.shipbob.com\/blog\/inventory-replenishment\/\">replenish inventory<\/a>, including buffer stock.\u00a0<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-to-calculate-buffer-inventory-levels\">How to calculate buffer inventory levels<\/h2>\n\n\n\n<p><span>How much inventory you have on hand to act as a buffer depends on several factors. There is no one-size fits all in determining how much buffer inventory to store, so you will have to do some math to determine the right amount that make sense for your business.&nbsp;<\/span><\/p>\n\n\n\n<p><span>There are several ways to calculate optimal buffer inventory levels, but no matter what method you choose, you will need access to <\/span><a href=\"https:\/\/www.shipbob.com\/blog\/new-free-analytics-reporting-tool\/\"><span>analytics and reporting tools<\/span><\/a><span> that help you <\/span><a href=\"https:\/\/www.shipbob.com\/inventory-management\/inventory-control\/\"><span>control inventory<\/span><\/a><span> by providing historical order data, SKU performance insights, and demand forecasting tools.&nbsp;<\/span><\/p>\n\n\n\n<p><span>Having the right type of data at your finger tips will help you easily calculate the right amount of buffer inventory to optimise <a href=\"https:\/\/www.shipbob.com\/warehouse-operations\/inventory-storage\/\">inventory storage<\/a> and ensure orders are fulfilled on time.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-safety-stock-calculation\">Safety stock calculation<\/h3>\n\n\n\n<p><span>The <\/span><a href=\"https:\/\/www.shipbob.com\/inventory-kpis\/safety-stock\/\"><span>safety stock formula<\/span><\/a><span> is a great way to easily determine an optimal amount of inventory buffer in case of an unexpected situation.&nbsp;<\/span><\/p>\n\n\n\n<p><span>To calculate safety stock, first, determine your product\u2019s average daily use and multiply it by its average lead time (how many days does it take between the time an order is placed and when that order arrives to your customer). Then subtract the result from your maximum daily use multiplied by your maximum lead time. The final result is the safety stock number for that specific product.<\/span><\/p>\n\n\n\n<p><span>Here is the formula:<\/span><\/p>\n\n\n\n<p><span>(Maximum daily sales x Maximum lead time) \u2013 (Average daily usage x Average lead time)<\/span><\/p>\n\n\n\n<p><span>To test the safety stock formula, you can use this <\/span><a href=\"https:\/\/www.shipbob.com\/safety-stock-calculator\/\"><span>safety stock calculator<\/span><\/a><span> and quickly determine how much safety stock makes the most sense for your online store.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-hezier-and-render-s-method\">Hezier and Render\u2019s method<\/h3>\n\n\n\n<p><span>Jay Hezier and Barry Render are professors and the authors of <\/span><i><span>Operations Management<\/span><\/i><span>: <\/span><i><span>Sustainability and Supply Chain Management. <\/span><\/i><span>Heizer and Render developed an inventory buffer method that works well if inventory levels vary significantly due to inconsistencies with your supplier or manufacturer.&nbsp;<\/span><\/p>\n\n\n\n<p><span>The Hezier and Render\u2019s buffer inventory method uses the standard deviation of the lead time distribution and desired service factor (i.e., probability that a stockout will not occur). This gives you a more accurate picture of how much buffer you should have on hand based on previous supply chain delays.<\/span><\/p>\n\n\n\n<p><span>The Hezier and Render method is calculated by multiplying your desired service factor (Z) by the standard deviation in lead time (\ud835\udf0eLT)<em>, <\/em>which is the degree and frequency by which the average lead time differs from the actual lead time. See formula below:&nbsp;<\/span><\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-style-blog is-layout-flow wp-block-quote-is-layout-flow\">\n<p><span>Z x \ud835\udf0eLT<\/span><\/p>\n<\/blockquote>\n\n\n\n<p><span>Keep in mind that the higher your service factor level is, the more buffer inventory you will need, which can significantly increase <a href=\"https:\/\/www.shipbob.com\/blog\/inventory-carrying-costs\/\">carrying costs<\/a>.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-greasley-s-method\">Greasley\u2019s method<\/h3>\n\n\n\n<p><span>Andrew Greasley is a UK-based lecturer and author of several books related to operations management. Greasley\u2019s method of inventory calculation not only takes into account both the standard deviation of lead time and desired service factor but also average demand. <\/span><span>The formula is as followed:<\/span><\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-style-blog is-layout-flow wp-block-quote-is-layout-flow\">\n<p><span>\ud835\udf0e<\/span><span>LT<\/span><span>x average demand x Z <\/span><\/p>\n<\/blockquote>\n\n\n\n<p><span>Here, the standard deviation in lead times refers to the variability or volatility in lead times, over a period of time, while average demand signifies the number of goods needed to meet customer demand in a fixed period.&nbsp;<\/span><\/p>\n\n\n\n<p><span>This method is commonly used when the demand and the lead time tend to vary a lot. However, it does not take into consideration the quantities of stock that are still in production and not yet ready for sale.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-historical-demand-based-buffer-inventory\">Historical demand-based buffer inventory<\/h3>\n\n\n\n<p><span>No matter how you calculate inventory, it\u2019s always a good idea to have access to historical order and inventory data. <\/span><a href=\"https:\/\/www.shipbob.com\/inventory-management\/inventory-forecasting\/\"><span>Inventory forecasting<\/span><\/a><span> requires extensive planning to ensure your business is prepared to consistently meet demand while staying conscious of not ordering too much (which can increase the costs of storing excess inventory and eventually cut into profits).<\/span><\/p>\n\n\n\n<p><span>By using <\/span><a href=\"https:\/\/www.shipbob.com\/blog\/demand-forecasting\/\"><span>demand forecasting<\/span><\/a><span> tools, you can easily integrate all of supply chain data from multiple channels to provide an overview of actual product demand and insight into sales forecasts.&nbsp;<\/span><\/p>\n\n\n\n<p><span>Being able to view <a href=\"https:\/\/www.shipbob.com\/inventory-kpis\/inventory-turnover-ratio\/\">inventory turnover rate<\/a>, SKU performance by location and sales channel, and other insights can help you forecast growth and trend projection on a more granular level, so you know just how much buffer inventory makes the most sense based on past supply chain trends.&nbsp;<\/span> <\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-simplifying-your-inventory-management\">Simplifying your inventory management<\/h2>\n\n\n\n<p><span>Managing inventory is not easy and is often a moving target. Managing inventory can be a full-time job, not to mention it can take up a lot of time and resources.&nbsp;<\/span><\/p>\n\n\n\n<p><span>As your business grows, you might want to consider ways to simplify the <a href=\"https:\/\/www.shipbob.com\/inventory-management\/\">inventory management<\/a> process by investing in technology and\/or partnering with logistics experts that can help you save time and money.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-use-inventory-management-software\">Use inventory management software<\/h3>\n\n\n\n<p><span>By implementing <\/span><a href=\"https:\/\/www.shipbob.com\/inventory-management\/software\/\"><span>inventory management software<\/span><\/a><span>, you can track and manage inventory from multiple channels in real time. Different types of <\/span><span><a href=\"https:\/\/www.shipbob.com\/blog\/best-inventory-apps\/\">inventory apps<\/a> and software are designed to help you analyse historical order trends and inventory data to make better decisions on inventory that optimises costs while meeting demand. <\/span><\/p>\n\n\n\n<p><span>Depending on the type of software you use, you can <a href=\"https:\/\/www.shipbob.com\/inventory-management\/inventory-optimization\/\">optimise inventory<\/a>, reduce <a href=\"https:\/\/www.shipbob.com\/blog\/logistics-costs\/\">logistics costs<\/a>, and ensure you always have enough sellable inventory in the right place at the right time.\u00a0<\/span><\/p>\n\n\n\n<p><span>For instance, ShipBob\u2019s technology offers inventory management tools built-in to help you track inventory in real time. From ShipBob\u2019s dashboard, you can view <a href=\"https:\/\/www.shipbob.com\/inventory-kpis\/inventory-days-on-hand\/\">inventory on hand<\/a> by fulfilment centre and see what inventory is in transit:<\/span><\/p>\n\n\n\n<p><img loading=\"lazy\" decoding=\"async\" width=\"1662\" height=\"535\" class=\"alignnone size-full wp-image-12297\" src=\"https:\/\/www.shipbob.com\/wp-content\/uploads\/2021\/04\/art16.png?w=1280px\" alt=\"\" data-responsive-img srcset=\"https:\/\/www.shipbob.com\/wp-content\/uploads\/2021\/04\/art16.png?w=700px 650w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2021\/04\/art16.png?w=860px 768w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2021\/04\/art16.png?w=1180px 1080w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2021\/04\/art16.png?w=1400px 1280w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2021\/04\/art16.png?w=1600px 1440w\" fetchpriority=\"low\" \/><\/p>\n\n\n\n<p>ShipBob\u2019s technology also integrates with leading <a href=\"https:\/\/www.shipbob.com\/partners\/#inventory\">inventory management solutions,<\/a> which makes it easy to plug ShipBob into your already existing tech stack.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-style-blog is-layout-flow wp-block-quote-is-layout-flow\">\n<p><i><span>\u201cAnother ShipBob integration I love is Inventory Planner. It saves me hours every week in Excel spreadsheets, and I can raise a PO in minutes when it used to take me hours.<\/span><\/i><\/p>\n\n\n\n<p><i><span>For every order I placed for years, I was ordering too much or not enough. Between inventory forecasting tools and the ability to auto-create WROs, we don\u2019t have stockouts much anymore. I sleep better at night.\u201d<\/span><\/i><\/p>\n\n\n\n<p><span>Wes Brown, Head of Operations at <\/span><a href=\"https:\/\/www.shipbob.com\/blog\/black-claw\/\"><span>Black Claw LLC<\/span><\/a><\/p>\n<\/blockquote>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-hire-a-professional-consultant\">Hire a professional consultant<\/h3>\n\n\n\n<p><span>The closer you are to a problem, the more difficult it is to identify solutions. This also implies in operating your own supply chain.&nbsp;<\/span><\/p>\n\n\n\n<p><span>Logistics takes up a lot of time, and if you\u2019re like most business owners, you didn\u2019t build an online store to spend all your time optimising inventory. But the decisions you make related to inventory have a tremendous impact on your ability to offer reliable fulfilment and fast shipping for your customers.<\/span><\/p>\n\n\n\n<p><span>Fast-growing online brands tend to hire experts in logistics, such as <\/span><a href=\"https:\/\/www.shipbob.com\/3pl\/companies\/\"><span>3PL companies<\/span><\/a><span>, that provide expertise, technology, and resources to help you <\/span><a href=\"https:\/\/www.shipbob.com\/blog\/inventory-levels\/\"><span>optimise inventory levels<\/span><\/a><span> while spending less time on logistics.&nbsp;<\/span><\/p>\n\n\n\n<p><span>For instance, ShipBob is a 3PL with an intuitive technology that offers historical order data, which can can help you calculate your ideal <\/span><a href=\"https:\/\/www.shipbob.com\/blog\/reorder-quantity-formula\/\"><span>reorder quantity<\/span><\/a><span> and how much buffer inventory you need to <a href=\"https:\/\/www.shipbob.com\/inventory-kpis\/stockout-costs\/\">prevent stockouts<\/a>.<\/span><\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-style-blog is-layout-flow wp-block-quote-is-layout-flow\">\n<p><i><span>\u201cSo many 3PLs have either bad or no front-facing software, making it impossible to keep track of what\u2019s leaving or entering the warehouse.<\/span><\/i><\/p>\n\n\n\n<p><i><span>On the supply chain side, I just throw in what we placed at the factory into a WRO in the ShipBob dashboard, and I can see how many units we have on-hand, what\u2019s incoming, what\u2019s at docks, and so on. I can see all of those numbers in a few seconds, and it makes life so much easier.\u201d<\/span><\/i><\/p>\n\n\n\n<p><span>Harley Abrams, Operations Manager of <\/span><a href=\"https:\/\/www.shipbob.com\/blog\/superspeed-golf\/\"><span>SuperSpeed Golf, LLC<\/span><\/a><\/p>\n<\/blockquote>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-outsource-to-a-3pl-like-shipbob\">Outsource to a 3PL like ShipBob<\/h3>\n\n\n\n<p><a href=\"https:\/\/www.shipbob.com\/blog\/supply-chain-management\/\"><span>Supply chain management<\/span><\/a><span> is a time-consuming process. Managing inventory, <\/span><a href=\"https:\/\/www.shipbob.com\/blog\/warehousing\/\"><span>warehousing<\/span><\/a><span>, and fulfilling and shipping orders can eat up time, money, and energy.&nbsp;<\/span><\/p>\n\n\n\n<p><span>A <\/span><a href=\"https:\/\/www.shipbob.com\/blog\/technology-enabled-3pl-fulfillment-top-benefits\/\"><span>tech-enabled 3PL<\/span><\/a><span> like ShipBob can help you with <a href=\"https:\/\/www.shipbob.com\/blog\/supply-chain-planning\/\">supply chain planning<\/a> and management with built-in inventory management tools, <\/span><a href=\"https:\/\/www.shipbob.com\/fast-fulfillment\/\"><span>fast fulfilment<\/span><\/a><span>, and <\/span><a href=\"https:\/\/www.shipbob.com\/inventory-automation\/\"><span>automated shipping<\/span><\/a><span>. With ShipBob, you can store inventory in <a href=\"https:\/\/www.shipbob.com\/blog\/split-inventory-across-multiple-fulfillment-centers\/\">multiple fulfilment centres<\/a> across the globe while tracking the entire order and inventory process all from one dashboard.<\/span><\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-embed-handler wp-block-embed-embed-handler wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe loading=\"lazy\" title=\"ShipBob Fulfillment Center Guided Tour - 3D 360\u00b0 VR Video\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/YdTbM4XlizY?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n<\/div><\/figure>\n\n\n\n<p><span>ShipBob\u2019s intuitive, user-friendly <a href=\"https:\/\/www.shipbob.com\/fulfillment-software\/\">fulfilment software<\/a> also gives you access to real-time inventory updates, as well as the ability to set automatic reorder point notifications, forecast demand, and <\/span><a href=\"https:\/\/www.shipbob.com\/blog\/inventory-allocation\/\"><span>allocate inventory<\/span><\/a><span> strategically across your distribution network.&nbsp;<\/span><\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-style-blog is-layout-flow wp-block-quote-is-layout-flow\">\n<p><i><span>\u201cI felt like I couldn\u2019t grow until I moved to ShipBob. Now I am encouraged to sell more with them. My CPA even said to me, \u2018thank god you switched to ShipBob.\u2019\u201d<\/span><\/i><\/p>\n\n\n\n<p><span>Courtney Lee, founder of <\/span><a href=\"https:\/\/www.shipbob.com\/blog\/prymal\/\"><span>Prymal<\/span><\/a><\/p>\n<\/blockquote>\n\n\n\n<p><span>By partnering with ShipBob, you can optimise <a href=\"https:\/\/www.shipbob.com\/blog\/supply-chain-operations\/\">supply chain operations<\/a> while reducing logistics costs, saving time, and providing a consistent and reliable experience for your customers. Optimise your <a href=\"https:\/\/www.shipbob.com\/blog\/logistics-operations\/\">logistics operations<\/a> by getting in touch with ShipBob today through the button below.&nbsp;<\/span><\/p>\n\n\n\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/www.shipbob.com\/quote\/\"><strong>Request Fulfilment Pricing<\/strong><\/a><\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-improve-inventory-management-with-shipbob-s-wms\">Improve inventory management with ShipBob&#8217;s WMS<\/h2>\n\n\n\n<p>For brands looking to store inventory and fulfil orders within their own warehouses, <a href=\"https:\/\/www.shipbob.com\/product\/merchant-plus\/\">ShipBob&#8217;s warehouse management system (WMS)<\/a> can provide better visibility and <a href=\"https:\/\/www.shipbob.com\/blog\/warehouse-organization\/\">organisation<\/a>.<\/p>\n\n\n\n<p>Ecommerce merchants can now leverage ShipBob&#8217;s WMS (the same one that powers ShipBob&#8217;s global fulfilment network) to streamline in-house inventory management and fulfilment. With real-time, location-specific inventory visibility, intelligent cycle counts, and built-in checks and balances, your team can improve inventory accuracy without sacrificing operational efficiency.<\/p>\n\n\n\n<p>For brands looking to scale internationally, ShipBob even offers a hybrid solution where merchants can employ ShipBob\u2019s WMS technology in their own warehouses while simultaneously leveraging ShipBob\u2019s fulfilment services in any of ShipBob\u2019s fulfilment centres across the US, Canada, Europe, and Australia to improve cross-border shipping, reduce costs, and speed up deliveries.<\/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-plus\/\">Explore ShipBob&#8217;s WMS<\/a><\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-buffer-inventory-faqs\">Buffer inventory FAQs<\/h2>\n\n\n\n<p><span>Here are answers to common questions related to buffer inventory when it comes to running an <\/span><a href=\"https:\/\/www.shipbob.com\/blog\/ecommerce-supply-chain\/\"><span>ecommerce supply chain<\/span><\/a><span>. <\/span><\/p>\n\n\n\n<section class=\"wp-block-shipbob-blocks-section-container section section-container  max-width-blog\"><div class=\"container section-info section-info-align-none u-hidden\"><h6 class=\"section-title\"><\/h6><h2 class=\"section-content h2\"><\/h2><p class=\"section-copy u-hidden\"><\/p><\/div><div class=\"container flex-container direction-col justify-none align-none flex-wrap\">\n\n<div class=\"wp-block-shipbob-blocks-single-faq single-faq direction-col  col-8\" data-controller=\"faq-controller\" data-faq-controller-open-value=\"true\"><div class=\"single-faq-title-contianer\"><h4 class=\"single-faq-title\">What is buffer stock?<\/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><span>Buffer stock refers to extra inventory kept on hand in case of manufacturing delays or an unexpected increase in demand. Calculating the right amount of buffer stock to have available helps to keep carrying costs low while making sure customer orders are fulfilled on time.<\/span><\/p>\n\n<\/div><\/div><\/div>\n\n\n<div class=\"wp-block-shipbob-blocks-single-faq single-faq direction-col  col-8\" data-controller=\"faq-controller\" data-faq-controller-open-value=\"true\"><div class=\"single-faq-title-contianer\"><h4 class=\"single-faq-title\">What are the advantages of buffer inventory?<\/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><span>Managing inventory can be a moving target, especially if your inventory turnover rate is high and <a href=\"https:\/\/www.shipbob.com\/blog\/days-sales-inventory\/\">days sales in inventory<\/a> is low. In such situations, having sufficient buffer inventory helps safeguard your business from unexpected delays and shifts in demand. Thus, it reduces the likelihood of out-of-stock issues and lost sales.<\/span><\/p>\n\n<\/div><\/div><\/div>\n\n\n<div class=\"wp-block-shipbob-blocks-single-faq single-faq direction-col  col-8\" data-controller=\"faq-controller\" data-faq-controller-open-value=\"true\"><div class=\"single-faq-title-contianer\"><h4 class=\"single-faq-title\">What are the disadvantages of buffer inventory?<\/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><span>Buffer inventory provides businesses with peace of mind, knowing they have extra stock to meet demand. However, buffer inventory will always consists of higher carrying costs, and you may risk paying for storage on unsellable inventory if it sits on the shelves too long.<\/span><\/p>\n\n<\/div><\/div><\/div>\n\n\n<div class=\"wp-block-shipbob-blocks-single-faq single-faq direction-col  col-8\" data-controller=\"faq-controller\" data-faq-controller-open-value=\"true\"><div class=\"single-faq-title-contianer\"><h4 class=\"single-faq-title\">Is buffer stock and safety stock the same thing?<\/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><span>In some cases, &lsquo;buffer stock&rsquo; refers to inventory held specifically for unexpected increase in product demand and &lsquo;safety stock&rsquo; refers to inventory held in case of supply chain delays. However, both terms are often used interchangeably and serve the same purpose: to ensure orders are fulfilled on time and prevent stockouts.<\/span><\/p>\n\n<\/div><\/div><\/div>\n\n<\/div><div class=\"container section-cta u-hidden\"><a class=\"btn btn-primary\" href=\"\"><\/a><\/div><\/section>\n","protected":false},"excerpt":{"rendered":"<p>Learn the advantages of having buffer inventory on hand, how to calculate, and how a 3PL like ShipBob can help simplify inventory management. <\/p>\n","protected":false},"author":110,"featured_media":194,"parent":0,"template":"","meta":{"content-type":"","inline_featured_image":false,"footnotes":""},"blogcategories":[8,15],"class_list":["post-193","blog","type-blog","status-publish","has-post-thumbnail","hentry","blogcategories-inventory","blogcategories-warehouse-management"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.5 (Yoast SEO v27.5) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ 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