Are you looking to expand your product line or are you looking to reduce your operating costs?

If you’re the former, then it’s time to be thinking about increasing your inventory quantities. But if you’re the latter, then it’s time to consider reducing them.

According to the ClickFunnels team, there’s a formula that determines how much inventory you should keep at any given time.

They suggest that you should set a limit based on the amount of revenue you’re making per day. So if you’re generating $20,000 per day, then you’d want to keep around 6,666 units of that product in stock at all times to ensure that customers can still be satisfied.

They also recommend that you should consider whether you’ll benefit from the higher inventory levels or whether you’ll simply spend more money on storage and shipping fees.

Raising The Limit

You might be wondering whether it’s possible to raise your inventory limits at all. After all, wouldn’t it make sense to keep more inventory so that you can sell it at a higher rate?

The answer is yes, however, you need to follow the right procedures. And to do that, you need to contact the company directly.

The first step is to examine your sales records. Find out how many sales you’ve made over the years and take that into consideration when setting your current inventory limit. Then, you need to consider if there’s been any significant changes to your business over the years that would affect how much you should keep in stock.

If you’ve been operating for a few years and have had no problems with deliveries or returns, then you can safely raise your inventory levels.

Reducing The Limit

Inventory levels should be reduced when there’s been a significant change to your business model or when you begin to see significant losses. For example, if you’ve operated for several years without problems and all of a sudden you begin to see a sharp increase in delivery fees or damages caused in shipping.

In order to safely reduce your inventory levels, you need to contact the company immediately and describe your situation. Then he will help you establish a new inventory limit that’s more suitable for your current needs. Raising and lowering your inventory levels is a very common occurrence and something that should happen with some regularity as your business grows and changes.

If you’ve been operating for several years and have seen significant growth, then it might be time to consider an inventory reduction. Especially if you’ve been having problems with damaged products or dissatisfied customers.

In general, the formula that determines how much inventory you should keep varies from product to product, however, it usually takes into consideration how much you’re making per day and how much you’ve sold over the years. So if you’re wondering whether you should raise or lower your inventory levels, then simply consider your income and see if you should increase or decrease your stocks based on that.