What's the Difference Between On Hand (Shelf) and Available (Store) Inventory?
You might think that inventory is as simple as keeping track of how many products you have and can sell.
If you look into it, however, inventory can be a bit more complicated. There are actually two subcategories of inventory, and keeping track of both of them can be great for your business. These two categories are on hand inventory and available inventory. While they might sound like the same thing, they are quite different. Here’s how managing and keeping track of both categories can do a lot for your business.
On hand inventory is the amount of a product that you have in your warehouse/storage location. Available inventory is the amount of a product you actually have available to sell. Your available inventory will go down with each sale, but on hand inventory is not quite so simple. If you have 50 products in your storage location and you sell one, your available inventory goes down to 49. You have one less product available to be sold, and thus your available inventory will show this. However, the item is still in the storage location. The on hand inventory will stay at 50 until the item leaves the storage location. Depending on how many products you have waiting to be packaged and shipped, your on hand inventory will usually be some amount higher than your available inventory.
So why might you want to keep track of these different numbers? The numbers will sync once you pick and fulfill all the orders that have been placed, and you won’t have a problem as long as you just sell from your available inventory. However, there are times when you might offer more of a product then you have in your available inventory. Suppose a product is on back-order, or you plan on drop shipping it. You would still want to sell the product even though you don’t have it in your available inventory. Just be careful that you don’t sell more of a product then you will eventually be able to provide.
On the other hand, sometimes you might not want to sell all of a product you have in storage. Suppose you want to save a product for free distribution or to sell to retail outlets. You could have a number of on hand inventory in storage, and a smaller number of available inventory. That way you could make sure that you would save some of the product. Whether you want to sell more than you have, or save some of what you have, having these two different quantities of inventory can be extremely useful.
While the notion of tracking these two different forms of inventory is daunting, there is a simple solution. Bizelo’s eRetail Inventory Management App will keep track of both on hand and available inventory. It allows you to easily update each of the two different inventory quantities per product per storage location. Controlling these two numbers can be an extremely powerful tool for your business. Check it out today, and make inventory management easy!