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If you’re in the D2C space, chances are you’ve already heard about the Limited Supply Podcast. Hosted by Moiz Ali, the founder of Native, and Nik Sharma, the mastermind behind Sharma Brands, the podcast has been a go-to resource and a favorite for D2C entrepreneurs.
These two industry experts don’t just talk about D2C, they’ve lived it, and they bring their no-nonsense advice and unfiltered opinions straight to their listeners every episode.
In this article, we explore some of the most frequently discussed inventory management topics and questions featured in Season 5, Episode 1, as well as insights from other episodes of the Limited Supply Podcast.
Top 5 Inventory Questions Asked on Limited Supply Podcast Episodes
Below are some of the most popular inventory questions that have been asked on the Limited Supply Podcast.
We decided to document the answers for you, blending insights shared on the podcast with everything we’ve learned from helping 100+ Shopify businesses.
Podcast Question 1: How much inventory should a business hold?
Nik Sharma and Moiz Ali offer some actionable advice throughout the podcast about how much inventory a business should hold. One useful discussion happened on this particular podcast episode which gave D2C entrepreneurs four important things to keep in mind
1. Start with small quantities
Moiz recalled being told to order 5,000, 10,000, and 20,000 plastic components for deodorants at Native, which made him worry about storage and the risk of business failure.
For Native, he decided to buy smaller quantities at a higher price. To play it safe, one must place orders in smaller quantities in the beginning, even if it costs more per unit.
2. Plan for delays
Make sure you always consider lead times and seasonal blockers.
Moiz shares how festive delays affected their supply chains, "We realized the lead time doubled because suppliers in China were booked up, and it caught us off guard. After that, we made sure to forecast better and plan around these periods."
We also covered this topic in more detail during our webinar for Limited Supply channel members, where we discussed how apps like Prediko can help optimize forecasting and minimize the impact of delays.
3. Scale gradually
Nik chimed in with advice for scaling inventory once the business gains traction “You have to start with small orders and use sales data to inform your decisions. Once you have consistent demand, then it makes sense to order in bulk, negotiate better pricing, and build relationships with suppliers.
But even then, always factor in lead times, especially during things like Chinese New Year, when everything slows down.”
4. Focus on liquidity
Holding too much inventory could tie up your cash flow and limit growth opportunities. Moiz points out, “The goal isn’t just to have inventory. The goal is to have inventory that moves.”
Hear the full conversation on Apple Podcasts
Podcast Question 2: How can businesses navigate lead time challenges?
Staying on top of lead times is important to maintain a smooth supply chain and meet customer demands without delays. Nik Sharma and Moiz Ali shared some great tips for handling lead times in Season 5, Episode 1
1. Account for seasonality in your forecasts
Moiz shares an incident when lead times unexpectedly doubled due to the Chinese New Year, causing delays for Native, "We realized the lead time went from six weeks to 12 or 18 weeks because suppliers in China were booked up.”
This experience taught them the importance of forecasting and accounting for potential seasonal delays.
2. Build supplier relationships
Both hosts highlight the value of strong supplier partnerships. Moiz talked about agility, "Early on, you need a ton of flexibility. We were able to call our contract manufacturer and say, ‘Tomorrow, switch production from lavender and rose to coconut and vanilla because we’re running out.’ That kind of flexibility was critical for us.”
However, he noted this comes at a cost since flexible suppliers typically charge higher prices.
3. Plan buffer stock smartly
To mitigate delays, Moiz recommends maintaining buffer stock during peak periods like Black Friday.
"You want to stock up with maybe 90 to 120 days of inventory going into Black Friday but drop to 30 to 60 days during slower months. That way, your cash isn’t tied up unnecessarily, but you’re prepared for spikes in demand."
4. Optimize communication
Nik emphasized the importance of real-time communication with suppliers and 3PLs.
"Work with partners who you can call or text at any time. If there’s an issue, you want someone who feels responsible enough to lose sleep over it, not just pass the problem to tomorrow."
Podcast Question 3: What role does pricing strategy play in inventory management?
Pricing strategy is an important component in effective inventory management, as highlighted by Moiz Ali in Season 5, Episode 1.
His experience at Native gave insight into how D2C entrepreneurs can approach pricing decisions
1. Ensure it covers Initial costs
He recalled how Native's early pricing decisions revolved around managing high costs while ensuring the product would sell.
When Native was starting out, the cost per unit of deodorant components was steep, around $10 for production and shipping. Moiz decided to price the deodorant at $12, a figure that left just a small profit margin while keeping the product accessible to consumers. “I was making a dollar or two in profit, and that seemed fair at the time,” he said.
2. Accommodate dynamic costs
Your pricing needs to accommodate not just inventory costs but the broader operational ecosystem, including marketing expenses to run a profitable business.
As Native’s production scaled, their per-unit cost dropped to $2 at 100,000 units per run. Moiz in the podcast recollected, “As our prices went down, our customer acquisition costs went up. So whatever we saved on production, we ended up spending on Facebook.”
3. Set new standards for market and customer expectations
When Native was acquired by P&G, its $12 price point set a new benchmark in the deodorant market. Moiz remarked, “P&G raised the prices of their own brands like Old Spice and Secret because they realized people were willing to pay more.”
This highlights the long-term influence of pricing on your brand positioning, consumer behavior, and competitors.
Podcast Question 4: How can businesses manage excess inventory or overstock?
Managing excess inventory or overstock is a critical challenge for D2C entrepreneurs, and this is something that Nik Sharma and Moiz Ali have discussed multiple times on the podcast.
In Season 5, Episode 1 Moiz highlighted how overstock problems often stem from misaligned forecasts, saying, “What happened during COVID was that everyone’s e-commerce business exploded. Companies started over-ordering for 2021, and when demand normalized in 2022, they were stuck with excess inventory.”
To tackle such situations, the duo offered practical solutions.
- Moiz emphasized the importance of maintaining inventory turnover, “My goal has always been three or four turns of inventory per year. This means your stock is sold and replaced three or four times annually, ensuring you don’t have cash sitting idle in the form of unsold goods.”
- He advised businesses to stock strategically based on seasonal demand. For example, “Going into Black Friday, you might hold 90 to 120 days of inventory, but during slower months like July, you only need 30 to 60 days”.
- Creative strategies such as bundling and clearance sales can be highly effective for clearing excess stock. They also discussed innovative approaches like offering "mystery bundles," which allow businesses to offload slow-moving inventory while surprising and delighting customers.
Precisely put, managing overstock requires a mix of proactive planning and reactive strategies. Aligning inventory levels with demand forecasts, being flexible, and using creative sales tactics can convert your excess inventory from a liability into an opportunity.
Podcast Question 5: What tools or software can help optimize inventory management?
Nik Sharma and Moiz Ali have frequently emphasized the importance of using the right tools to optimize operations and prevent costly mistakes.
Moiz Ali in Season 8, Episode 1 said, “You can’t scale a business without systems that replace manual effort with automation. The more data-driven and automated your processes are, the fewer mistakes you make, and the faster you can grow.”
Across several episodes, they outlined the categories of tools that are essential for scaling businesses while maintaining operational efficiency.
1. Inventory and order management software
Managing stock levels is a recurring theme in their discussions. Moiz talked about how tools that automate stock tracking are invaluable, "For Native, I needed to know when I was running low on lavender deodorant versus vanilla and send a reorder before it became a problem. Automating that was a game-changer."
Inventory management tools are designed to track inventory levels, orders, and warehouse activities. They provide real-time visibility across your supply chain and automate processes like purchase order creation, reorder alerts, and inventory forecasting. This prevents stockouts or overstock, ensuring orders are fulfilled quickly while lowering the risk of errors.
2. Enterprise resource planning (ERP) systems
Nik and Moiz often stressed the value of ERP systems that act as a central hub for inventory, orders, and accounting. These are primarily for record keeping and bringing together data across channels and tools for operations.
In Season 8, Episode 6, Moiz highlighted how ERP systems allow brands to handle multi-channel sales efficiently "You need a single source of truth that integrates everything, inventory, warehouse management, purchase orders, even EDI operations. Without it, you’re flying blind when scaling.”
3. Demand forecasting tools
In Season 5, Episode 1, Moiz explained how forecasting tools help businesses align inventory with future demand, "You can’t wait for Black Friday to realize you’re out of stock. With good forecasting, you can predict spikes and ensure you’re holding just enough inventory to meet demand.”
Nik added that these tools minimize cash flow issues by preventing overstock during slow seasons.
4. Warehouse management systems (WMS)
Nik often brought up the importance of streamlining warehouse operations. In Season 8, Episode 6, he highlighted the role of tools in managing logistics effectively, "If your warehouse isn’t efficient, whether it’s picking, packing, or shipping, you’re losing time and money. A WMS that tracks bins, routes, and real-time stock can make a massive difference."
5. Analytics and reporting tools
Understanding what sells and what doesn’t is important for managing inventory effectively. Data analysis and reports help you make educated decisions that positively impact your operations.
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Check out Nik and Moiz break down various DTC strategies
Moiz highlighted this in Season 6, Episode 3, saying "Data is everything. If you don’t know your sell-through rates or which SKUs are dead stock, you’re making decisions blind. Good reporting tools can save you from wasting money on the wrong inventory.”
How Prediko Tackles the Key Questions from Limited Supply Podcast
Prediko is an end-to-end inventory planning and management software that helps you handle multiple stores, warehouses, and bundles. Trusted by over 500+ brands, Prediko caters to Shopify stores of all sizes and types, solving most of the above questions
1. How much inventory should a business hold?
Prediko’s AI Demand Planning feature helps you break down your annual sales target into editable monthly forecasts across all your products, taking into account growth trends, seasonality, and historical sales data.
This helps you determine how much inventory to hold, avoiding both overstock and stockouts.
2. How can businesses navigate lead time challenges?
Prediko makes it easier to keep your stock aligned with lead time expectations. With its Purchase Order Management and Restock Alerts, you can track and manage all your purchase orders in one place, ensuring timely reordering before lead times stretch too long.
Plus, Prediko integrates seamlessly with 50+ 3PLs and WMS, giving you real-time visibility into potential delays.
3. What role does pricing strategy play in inventory management?
Pricing directly impacts inventory turnover, and Prediko’s Insights and Analytics help Shopify businesses adjust pricing based on product performance.
By monitoring sell-through rates, inventory health, and stock movements, you can easily identify slow-moving items and optimize your pricing or run promotions to clear out excess stock.
4. How can businesses manage excess inventory or overstock?
Prediko helps you manage excess inventory by offering analytics, accurate sales forecasts, and an intuitive Buying Table.
Through real-time tracking and health status, you can identify slow-moving stock early and take action to clear it out.
By forecasting demand based on past trends, Prediko ensures you're not overstocking during slower months while staying prepared for spikes in demand during peak seasons.
5. What tools or software can help optimize inventory management?
Prediko is an all-in-one inventory management solution that combines AI demand forecasting, purchase order management, production planning, and analytics. Its features work together to streamline and optimize your entire supply chain.
Plus, with over 50 integrations, including WMS and 3PLs, it reduces manual effort and brings all aspects of inventory management into one platform for real-time updates and better decision-making.
Wish to know how Prediko can help your business? Book a demo with our team today.
