{"id":681,"date":"2022-02-21T06:00:00","date_gmt":"2022-02-21T11:00:00","guid":{"rendered":"https:\/\/www.shipbob.com\/uk\/blog\/inventory-position\/"},"modified":"2025-09-16T17:53:02","modified_gmt":"2025-09-16T17:53:02","slug":"inventory-position","status":"publish","type":"blog","link":"https:\/\/www.shipbob.com\/uk\/blog\/inventory-position\/","title":{"rendered":"Inventory Position: What is it & How to Improve It"},"content":{"rendered":"\n

Table of Contents<\/p>

** Minutes<\/p><\/div><\/div>\n

What does inventory position mean?<\/a><\/p>\n\n\n\n

Why is inventory positioning important?<\/a><\/p>\n\n\n\n

How to position your inventory?<\/a><\/p>\n\n\n\n

Leave the inventory positioning to the experts<\/a><\/p>\n\n\n\n

Improve in-house inventory management with ShipBob’s WMS<\/a><\/p>\n\n\n\n

Inventory Positioning FAQs<\/a><\/p>\n<\/div>\n\n\n\n

You picked your products. You put in the purchase order. You received your inventory.<\/p>\n\n\n\n

Now the question is: where do you put it?<\/p>\n\n\n\n

Inventory positioning is just as important as inventory order quantity \u2014 after all, there\u2019s no use in having plenty of inventory if you are unable to access it when you need it.<\/p>\n\n\n\n

With the right inventory positioning strategy, ecommerce businesses can know where to store their inventory so that customers receive orders on time and error-free, and can improve warehousing<\/a> efficiency and fulfilment speed.<\/p>\n\n\n\n

In this article, we will discuss what inventory position is, why it\u2019s important for ecommerce retailers, and we\u2019ll share some tips to help ecommerce companies get started with it. We\u2019ll also talk about how 3PLs like ShipBob can help improve inventory positioning efforts through outsourced logistics<\/a>.<\/p>\n\n\n\n

What does inventory position mean?<\/h2>\n\n\n\n

Inventory positioning refers to where a business\u2019s inventory is held \u2014 both its physical position in storage<\/a> space, and its position in the overall supply chain.<\/p>\n\n\n\n

In other words, the term \u201cinventory position\u201d is used to describe where and how inventory is stored on warehouse racks<\/a>, as well as what part of the supply chain inventory units are stored (such as stores, warehouses, or production lines).<\/p>\n\n\n\n

When optimised<\/a>, inventory positioning ensures that order fulfilment<\/a> SLAs are met and simultaneously keeps logistics and inventory costs low.<\/p>\n\n\n\n

Within the context of inventory accounting<\/a>, inventory position can also serve as a measure of the total amount of inventory owned by the retailer. The formula for calculating inventory position is:<\/p>\n\n\n\n

Inventory position = (on-order inventory + on-hand inventory) \u2013 backorders<\/p>\n\n\n\n

Why is inventory positioning important?<\/h2>\n\n\n\n

Where and how you position your inventory \u2014 both in storage and in your supply chain \u2014 hugley impacts your operational efficiency, operating costs, and your ability to satisfy customers.<\/p>\n\n\n\n

On the warehouse level, physically positioning your inventory to be easy to find and highly accessible makes picking easier, which improves overall fulfilment speed.<\/p>\n\n\n\n

It also lowers the likelihood of current inventory getting lost or forgotten about, which minimises waste and reduces average inventory holding costs<\/a>.<\/p>\n\n\n\n

On the supply chain level, storing inventory in a supply chain stage that minimises lead times enables you to better meet customer demand. When your inventory is available in the locations and channels you need it to be, you avoid stockouts<\/a> that annoy customers and drive them away.<\/p>\n\n\n\n

In addition, positioning inventory close to popular order destinations shortens shipping time while also cutting down shipping costs<\/a>.<\/p>\n\n\n\n

How to position your inventory?<\/h2>\n\n\n\n

Knowing how to physically position your inventory, the best locations, and supply chain stages can seem overwhelming. Here are some tips for positioning your inventory in warehouses, across locations, and in your supply chain.<\/p>\n\n\n\n

Ensure high-volume products are easily accessible<\/h3>\n\n\n\n

When designing your warehouse setup<\/a>, be mindful of which SKUs have the highest turnover rate<\/a>. Store these items in easy-to-reach locations that enable faster replenishment<\/a>. This saves pickers time, and speeds up the order fulfilment process as a whole.<\/p>\n\n\n\n

Make sure that high demand products<\/a> are also kept in stock at fulfilment centres<\/a> that are physically closest to popular order destination points (like major metropolises), as this significantly shortens delivery times.<\/p>\n\n\n\n

If a SKU<\/a> is popular, you can afford to hold it much farther along your supply chain. When you reliably forecast high demand for a product, you can order stock ahead of time and place units as close to customers as possible to minimise lead time.<\/p>\n\n\n\n

For less popular items, it\u2019s better to postpone placing a purchase order with your supplier until a customer places an order for that item (to avoid higher holding costs).<\/p>\n\n\n\n

Forecast demand to plan for future surges<\/h3>\n\n\n\n

Accurate demand forecasting<\/a> enables ecommerce businesses to position enough inventory in the right locations and channels to fulfil all customer orders.<\/p>\n\n\n\n

Even if safety stock<\/a> levels are healthy, poor demand forecasting can cause shortages and backorders<\/a> \u2014 both of which leave customers unhappy. Retroactively re-allocating inventory also increases holding and transportation costs, which could have been avoided with better forecasting.<\/p>\n\n\n\n

While it\u2019s tempting to forecast demand once, position inventory accordingly, and forget about it, ecommerce businesses should treat demand forecasting as an iterative, never-ending process.<\/p>\n\n\n\n

Seasonal trends and regional developments affect demand, and usually require a shift in inventory position.<\/p>\n\n\n\n

Some 3PLs<\/a> like ShipBob offer track important data and metrics to improve your inventory forecasting. Partnering with such a 3PL can make it easier to know when and how to change your stock levels.<\/p>\n\n\n\n

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\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. For every order I placed for years, I was ordering too much or not enough. <\/span><\/em><\/p>\n\n\n\n

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><\/em><\/p>\n\n\n\n

Wes Brown, Head of Operations at Black Claw LLC<\/a><\/span><\/p>\n<\/blockquote>\n\n\n\n

Keep heavy or bulky SKUs lower on your racks<\/h3>\n\n\n\n

For obvious reasons, it doesn\u2019t make much sense to have your heaviest<\/a> or least-movable SKUs at the top or back of your warehouse racks.<\/p>\n\n\n\n

Instead, store them as close to ground-level as is practical so that accessing them does not pose a safety hazard or require extreme effort.<\/p>\n\n\n\n

At the same time, adjust slotting<\/a> for bulky SKUs according to the SKU\u2019s popularity. If they turn over quickly, make sure to store them in an accessible location. If they are rarely ordered, consider storing smaller, lighter, or more frequently ordered items ahead of them.<\/p>\n\n\n\n

Leave the inventory positioning to the experts<\/h2>\n\n\n\n

Inventory positioning is complex, but mastering it is absolutely critical to delivering a good customer experience.<\/p>\n\n\n\n

Instead of struggling with it for months on end, thousands of small to midsize ecommerce businesses have chosen to outsource inventory positioning to ShipBob.<\/p>\n\n\n\n

ShipBob takes your inventory off your hands, and stores it close to your customers in one of our dozens of fulfilment centres. An expert team of warehouse workers compactly and cost-effectively slots your inventory, so that the picking<\/a> and packing process is as efficient as possible.<\/p>\n\n\n\n

ShipBob\u2019s dashboard is also equipped with the data and tools to make inventory management<\/a> and positioning easy, including:<\/p>\n\n\n\n