Effective inventory management is a cornerstone of any thriving supplement brand. One of the most crucial elements in this sphere is restocking. Restocking is more than just a routine process—it’s the lifeline that ensures your private label products are always available to meet customer demand.
However, as straightforward as it might seem, restocking is not without its challenges. These complications could range from logistical hitches to supplier reliability, particularly when there is an issue with a third-party manufacturer. In these situations, having a reliable manufacturing partner is more than a luxury, it’s an absolute necessity.
Such obstacles could impede the smooth flow of operations and risk business continuity and customer satisfaction. These risks magnify when dealing with products such as supplements in the health and wellness industry. Your customers rely on your products to help them live a higher quality of life, and delayed restocks could inspire them to seek a competing alternative.
As a private label liquid supplement manufacturer with over 40 years of serving some of the highest-rated brands in health and wellness, we’ve always prioritized providing our partners with an excellent inventory fulfillment experience. Today, we’re going to share some common restock challenges that private label resellers face with other solutions and how they can be overcome.
Understanding Restock Challenges in Private Labeling
Restock challenges are complications in replenishing inventory that may arise from various factors such as logistical hitches, inaccurate demand forecasting, or supplier reliability issues.
In today’s digital-first marketplace, you never know if a product that you sell could go viral online. When it does, this can create a massive spike in demand. For example, if it becomes promoted by an influencer with a large social media following, you could see an increased amount of purchases and sell-out of a product more quickly than anticipated.
While this one example will not happen for everyone, there are a number of other reasons that you could quickly find your stock depleted and a need to increase production. If you’re working with a supplier that is unable to scale with your product line, these issues can stand directly in the way of you being able to increase your sales and grow your brand.
Beyond monetary growth, restocking challenges can also create obstacles to customer satisfaction and brand perception. Late deliveries can lead to stockouts, frustrating your customers and motivating them to look elsewhere for a similar product. Persistent restock problems can tarnish your brand’s reputation and leave your customers unsure of whether or not to repeat a purchase.
Overcoming Restock Challenges with Strategic Planning
Accurate Demand Forecasting
One of the first steps to getting a better handle on your restocking process is to evaluate your current demand forecasting to ensure it is as accurate as possible. Understanding market demand for your supplements allows you to anticipate and prepare for future restocking.
Demand forecasting is an essential component of effective inventory management and restocking strategy. Several methods can be used to predict future demand, including:
- Time Series Analysis: This method uses historical data to identify patterns, trends, and seasonality, which are then projected into the future to estimate demand.
- Causal Models: These models consider the cause-and-effect relationships between demand and external factors. For example, the effect of price changes, marketing campaigns, economic indicators, or competitor activity on demand.
- Moving Average Forecast: This method involves using the average of the most recent periods to forecast the next period’s demand. It’s straightforward and useful when demand is stable and does not exhibit pronounced trends or seasonal patterns.
- Exponential Smoothing: This is a rule of thumb technique for smoothing time series data, and it’s often used for forecasting. It’s more weightage to recent observations, and the degree of weightage decrease exponentially.
These methods allow you to analyze past sales data and identify trends to predict future demand. Depending on the inventory management software that you use, some may also include machine learning or artificial intelligence capabilities to assist in these processes and provide a more proactive approach to forecasting accurately.
Safety Stock Management
Maintaining a level of safety stock is another essential component of a restocking strategy. Safety stock serves as a buffer to cushion unexpected spikes in demand or disruptions in the supply chain.
Determining the right level of safety stock depends on several factors. These include the variability in demand and lead times, and the reliability of your manufacturer. Higher variability or lower reliability would necessitate larger safety stock levels to ensure product availability.
When you’re searching for the right manufacturer to fulfill your production needs, you can also ask them for recommendations on appropriate safety stock for specific types of products. They may be able to provide you with a recommendation based on their historical experiences with other clients of theirs in your industry.
Leveraging Technology
Incorporating inventory management technology into your restocking strategy can significantly improve its efficiency. Software solutions that are designed to help you automate some of your inventory operations, for example, can remove much of the manual restocking processes. It can provide real-time visibility into your inventory levels, alert you to potential stockouts, and even generate purchase orders when stock levels fall below a certain threshold.
Depending on the manufacturer that you ultimately partner with, they may also utilize their own inventory management system or are willing to integrate with yours. This is something that you should discuss with a potential private label solution before you decide to contract with them for production.
Selecting the Right Private Label Contract Manufacturer
Your supplement manufacturing partner is a cornerstone in your inventory management process. Whether you’re looking to find a new one or if you’re just launching your brand, here are some key factors to look for:
Open Communication
Clear and regular communication with your manufacturer is invaluable in managing restocking effectively. By keeping your manufacturer informed about your demand forecasts and any anticipated shifts in the market, you can enable them to plan and prepare accordingly. This can result in smoother restocking and fewer surprises.
Manufacturing Capabilities
The capabilities of your private label contract manufacturer directly impact your restocking process. A manufacturer with airtight, scalable production processes can ensure timely and adequate replenishment of your products.
Some primary traits to evaluate include the manufacturer’s production capacity, scalability, and ability to adjust quickly to changing demand. A manufacturer that can scale up production swiftly in response to increased demand is an asset to your restocking strategy.
Supplier Reliability
Reliability is a critical attribute of a private label products manufacturer. A reliable manufacturer maintains consistent product quality, adheres to agreed delivery schedules, and communicates transparently about potential issues or delays. This level of reliability can greatly streamline your restocking process and reduce the risk of stockouts.
You should also consider how long the manufacturer has been in business. For example, a manufacturer that has been in business for decades is likely not at risk of closing anytime soon. They have remained viable through challenging economic conditions and have been a reliable resource for their partners in a constantly changing industry landscape where new, innovative formulas are a regular occurrence.
Supplier Inventory Management Practices
The inventory management practices of your contract manufacturer can also influence your restocking timelines. Knowing how often your manufacturer turns over their stock, as well as their storage and handling practices, can give you insights into their ability to supply your products consistently and in good condition.
Certifications and Credibility
A reputable contract manufacturer will have relevant certifications that validate their operational and manufacturing standards. For instance, a manufacturer producing dietary supplements should have certifications such as Good Manufacturing Practices (GMP), which demonstrate adherence to industry quality standards.
Certifications provide assurance regarding the quality and safety of your products. Beyond this, they may also indicate whether a manufacturer can satisfy specific ingredient requirements for your brand, such as certified organic or vegan formulas.
Scope of Service
When selecting a private label contract manufacturer, another crucial factor is the scope of their service. The manufacturer should not only produce your supplement products but also be able to handle packaging requirements according to your specifications. This encompasses everything from bottle type to industry-compliant labels and product inserts.
In addition to manufacturing and packaging, a reliable manufacturer should also facilitate quick shipment of your products to your distribution center. Prompt shipping ensures that you can maintain your restock schedules and meet customer demand in a timely manner.
Keep in mind that the manufacturer of your private label products is rarely also the distributor. To strengthen your resupply processes, you may also want to introduce your manufacturer to your distribution partner or in-house distribution manager so that they can better coordinate shipping and receiving of your products.
Get Reliable Private Label Product Manufacturing for Your Liquid Supplement Brand
At Yellow Emperor, we proudly serve many of the industry’s leading supplement brands as a trusted manufacturer of bespoke liquid supplement formulas. With over 40 years of experience, multiple certifications from leading third-party authorities, and near-limitless formulation possibilities, we are the scalable solution for that your brand can rely on to always keep the liquid supplements your customers love in stock.
To learn more about working with our team to introduce a new standard for quality liquid supplements into your product line, get a quote today.
