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6 minutes read

How to manage sales, inventory management and replenishment in COVID 19

What really happened in Corona time (COVID 19) with your sales and afterward in inventory management and replenishment is the critical knowledge for your business’s future?

“Fortune favors the prepared mind. (Louis Pasteur)”

inventory management

There are a few types of sales reactions during Corona (COVID 19) times. The one where sales significantly drop and the opposite, where sales increased considerably. 

Short term significant increase in sales during COVID 19


  • increasing by tens or hundreds of %

Inventory management:

  • higher stockouts at the beginning of COVID 19
  • higher frequency of purchasing
  • now you are probably dealing with access inventory
  • you should start to prepare your business for the next wave of COVID 19

Examples of sales categories: toys and games, hardware, home & garden, etc.

This type was about a short term reaction in your customer demand. Due to fear from new situations, panic, and different media information, your customers started to buy more quantities than ever before or more than a standard trend in your sales. See the image below. This situation was more frequent in e-commerce than in brick and mortar businesses. 

What happened with your inventory was probably that you had to faced stockouts due to higher demand at the first time of increase than you expected. After this first hit, you start to react properly with higher purchase orders, and you probably begin to purchase more frequently. After a few months, everything is on the same track as before COVID 19. 

Long term significant increase in sales during COVID 19


  • dealing with new level of demand

Inventory management:

  • facing a higher level of stockouts during the whole period because your business wasn’t ready for such high customer demand in that short period

Examples of sales categories: disinfectants, fitness food, etc.

The second type is really interesting because this means real change in your customers’ behavior and demand. After COVID 19 hit you, there was a relatively short period of sales increasing because of the new situation. But what is more interesting, the demand stays at a new level. So you hit another level of your business, and you are a lucky guy. Now you have to deal with a new level of logistics, purchase, distribution, etc. 

The short term significant decrease in sales during COVID 19


  • decreasing sales by tens of %

Inventory management:

  • you have access inventory 
  • if your business is based on products with short expiration, probably you deal with higher shrink

Examples: bridal wear, swimwear, etc.

The third type is about the balance in the market. There are always winners and losers. During COVID 19, your sales decline by tens of %. After a few months, everything is the same as before. 

The long term significant decrease in sales during COVID 19


  • dealing with a new lower level of sales that will last at minimum for the next few months or years 

Inventory management:

  • you should calculate new inventory levels (reorder point, minimum, maximum, and safety stocks)
  • you should calculate new purchase orders
  • you should find alternative suppliers because of lower purchase prices

Examples: luggage, briefcases, etc.

How can we help with inventory management and replenishment in COVID 19

First, Inventoro has a very special sensitivity for the identification of changes in sales. Inventoro is ready to identify decline or incline in customer’s demand within just a few days. Afterward, we recalculate the proper sales forecast, and then we can automatically calculate new optimum for purchase orders.

Inventory management is always about as quick reaction to what is just happening in the sales as possible. We can teach you how to use future sales forecasts instead of historical sales. 

Inventory management is a complex discipline. You have to calculate several key attributes like safety stocks, minimum and maximum inventory, reorder points, optimum service level, etc. Then you will be ready for anything happening in the market. 

If you want to eliminate business risk due to too much inventory, you should try our Inventory optimization and reduction.

How to improve your Inventory management for COVID 19

#1 Proper information about your stock levels

Sales forecasting and inventory optimization

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The number one recommendation is to keep your information about inventory in good shape. 

What you need to calculate optimum purchase orders is proper inventory levels for every item within your portfolio. Inventory accuracy is the source of every discrepancy between the physical and electronic evidence of your inventory. 

#2 Proper information about the lead time of and other variables of your supplier

This situation can be different than any other in history. You can take your phone and ask the biggest suppliers about their delivery performance in the next few months.

You should refresh variables like lead times (time between placing a purchase order and real delivery), the variability of lead time (it is an option for better results), order period (the time period in the future which will be covered by purchase order), MOQ (Minimum Order Quantity), etc.

Please talk with your suppliers.

#3 Adjusting your sales plan (sales forecast)

It’s said that what we have as people and computers don’t are experience and intuition. So you should use your intuition and make it real in the shape of a real sales plan adjustment.

No matter if you are using just some excel table. 

#4 Hard decision about Inventory strategy

In these times, you have to decide what your inventory strategy will be. You should decide what service level you will keep for the best sales categories in your portfolio. The same, you have to decide on worse selling categories. Is the proper level 99%, which means that you will satisfy almost every customer? Or just 95%, and you will be ok with 5% of unsatisfied customers. Your company has to know about these decisions.

  • Do you want to invest your money for higher inventory then optimum? It can be a little expensive, but you will be ready in case of a significant increase in sales
  • If you have multiple stores, does everyone need the same inventory level?
  • Do you want to have specific parts of your inventory just for e-commerce sales channels?

So is your Inventory management ready for the next COVID 19 wave?

Sales forecasting
and inventory optimization

Became a retail mastermind you always wanted to be.

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