Ghostbusters unite: How to combat the ghost economy
We know that theghost economy leads businesses to lose an average 11.7% of sales every year, totaling a huge global cost of $1.75 trillion annually. Then there’s the detrimental impact that issues likestockouts have oncustomer loyalty and profitability.
The question is: How can you avoid it? The first step is understanding the key drivers of the ghost economy before solving problems of scale with the right tools.
The ghost economy is costing you $1.75 trillion!
For more on the cost of the ghost economy to your eCommerce business, download our free eBook
Tangible culprits of the ghost economy – such as defective merchandise, spoilage, theft, and so on – are easy to spot for most businesses, and as such, are likely to be considered the biggest problems that need to be solved to combat lost sales and profitability.
However, it’s largely forces that you don’t see, or the tools you lack, that are responsible for much of what the ghost economy is swiping from you. In fact, poor business management practices alone are responsible for$728 billion in global losses every year:
$220 billion lost due to poor forecasting
$223 billion lost due to data disconnects
$285 billion lost due to “bad processes”
What’s causing the prevalence of bad business management? Simply put, businesses aren’t investing in the tools needed to accuratelymanage inventory and theirsupply chain. Let’s look at the numbers:
38% of businesses lack order, inventory management, POS, and 3PL software
34% of businesses lack necessary software integrations
28% of businesses lack inventory visibility across stores, warehouses, and vendors
The result? Ineffective processes led by guesswork and prone to human error, leading to all the hallmarks and negative impacts of the ghost economy.
How to transform your business and combat the ghost economy
Are my business decisions based on data rather than guesswork?
Do I automate key processes to reduce manual labor?
Are my business processes scalable?
If you answer ‘no’ to the questions above, your business is lacking the critical framework needed to avoid the effects of the ghost economy and grow sustainably.
The importance ofmastering inventory management in solving problems of scale can’t be understated. Utilizing smart inventory control tools enables full visibility over inventory data – including real-time quantity and location data – so you can make informed decisions about reordering and stock management to avoid overstocks and stockouts (some of the biggest contributors to the ghost economy).
Intelligent reporting and forecasting capabilities also empower you to make smarter decisions about order routing and fulfillment, and to more accurately plan for the future. What’s more, enabling supply chain automation with the right software reduces or eliminates manual work and frees you to focus on what matters: growing your business.
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