Choosing the best inventory management and fulfillment strategy is crucial for any company looking to cut costs, improve customer satisfaction, and increase growth. Supplement brands, with their shelf-life-sensitive products, need to be particularly cautious about choosing the right inventory process.
In this industry, FIFO and FEFO inventory management methods are often particularly popular, as they can help to ensure products stay fresh and compliant with regulations, improve customer satisfaction levels, and protect your brand’s reputation.
Both FIFO (First-In-First-Out) and FEFO (First-Expired-First-Out) inventory rotation methods for supplements can help you make the most of products with limited shelf lives. In this guide, we’ll introduce you to methods of reducing supplement waste with FIFO and FEFO. We’ll also help you choose the right option for your business, and show you how to align your inventory management and fulfillment strategies successfully, for ongoing sustainable growth.
Defining FIFO and FEFO
Unsure about the differences between first-in-first-out vs. first-expired-first-out inventory management strategies? Both of these options are popular among supplement companies, as well as countless brands dealing with limited-shelf-life goods.
Both systems aim to minimize waste, improve product freshness, and help companies stay compliant with industry regulations. However, each method has its own unique approach to managing inventory.
FIFO (First-In-First-Out)
The FIFO, or First-In-First-Out strategy for inventory management works by ensuring that the oldest inventory in your warehouse is the first to be shipped to customers.
Implementing FIFO in supplement warehousing processes means tracking the dates when products are first purchased or stored by your company. This means you can ensure the products that have spent the longest time in your warehouse, are the first to leave when you make a sale.
This system reduces the risk of stock sitting too long on shelves, ensuring that customers receive fresher products. For example, if a batch of vitamins arrives in the warehouse in January, FIFO ensures those are shipped first, even if newer stock arrives in February. This helps prevent expired or stale products from reaching customers, reducing waste and keeping customer satisfaction high.
FEFO (First-Expired-First-Out)
FEFO, or the “First-Expired-First-Out” strategy, on the other hand, prioritizes shipping products based on their expiration date. The FEFO strategy for perishable supplements is often a good way to minimize the risk of companies ending up with products sitting in their warehouses that they can no longer safely sell to their customers.
Unlike FIFO, FEFO doesn’t take the time a product arrives in your warehouse into account – just the date when that product is going to expire. This can be valuable for some supplement companies, as the products you source from manufacturers may have varying expiration dates.
With FEFO, even if you received a bottle of vitamins in January from one manufacturer, but a product received in February from a different manufacturer has a closer expiry date, you’d ship the one you received in February first.
Benefits of FIFO and FEFO for Supplement Brands
Both FIFO and FEFO inventory management are excellent options for supplement brands, who need to maintain careful control over products with limited shelf lives. Adopting these inventory control techniques can help supplement brands access benefits like:
Waste Reduction
The FIFO and FEFO inventory control techniques for supplement brands help minimize waste by ensuring that products are shipped out before they expire, allowing them to be used at their peak quality. With FIFO, older stock is prioritized, preventing products from sitting too long on shelves and potentially becoming unsellable. FEFO goes a step further by focusing on expiration dates, making sure that products closest to expiring are shipped first, even if they are newer.
By reducing the amount of expired or unsellable inventory you have sitting in your warehouse, these inventory management methods can save your company a lot of money. Not only will you have fewer inventory “losses”, but you could end up spending less on disposal costs too.
Fresher Products
Freshness is important in the supplement industry. Over time, supplements lose their potency, meaning the results they’ll deliver to your customers will be diminished. Using either FIFO or FEFO ensures that products reach customers at their freshest – long before they reach an expiry date.
This prioritization of freshness not only supports brand integrity but also guarantees that customers receive supplements with the highest quality and potency. Freshness enhances customer satisfaction, which is crucial if you want your buyers to keep coming back to your business.
Improved Compliance
FIFO and FEFO aren’t just practical tools for improving inventory management and customer satisfaction levels. They’re also critical for compliance. The supplement industry is exposed to a huge range of regulations and rules, intended to protect the health and wellbeing of consumers. To avoid serious fines and legal repercussions, companies need to ensure they’re not shipping products to customers that could be deemed unsafe or unfit for consumption.
FIFO and FEFO strategies help to enhance compliance through effective inventory management, by helping you to keep track of product expiration dates and shelf lives. They can reduce your risk of sending dangerous products to consumers, and dealing with unwanted legal issues.
Greater Customer Trust
Trust is the foundation of success for any supplement brand. After all, your customers need to trust you with their wellbeing and quality of life. They want to see evidence that you’re not only committed to giving them high-quality products, but that you’re following best practices for supplement inventory turnover, to ensure the products they receive are fresh and potent.
Implementing FIFO and FEFO inventory management strategies help to ensure product quality and reliability, meaning your offerings will constantly live up to customer expectations. These strategies can help you earn the long-term loyalty of your customers, turn buyers into advocates for your brand, and increase your overall profits and sales.
How to Choose Between FIFO and FEFO
Choosing the right inventory method for supplements can be tricky, particularly when both FIFO and FEFO have advantages to offer. Ultimately, the right choice for your company will depend on a few key factors, starting with the types of products you’re going to be selling.
If you’re offering customers less “perishable” products, like protein powders or capsules with a longer shelf life, FIFO often makes more sense. This method ensures older stock sells first without overcomplicating processes. But if you’re dealing with probiotics, liquid vitamins, or other expiration-sensitive products, FEFO is the smarter move. It prioritizes freshness and ensures products stay compliant with regulatory standards, protecting both your brand and customers.
Your brand priorities can come into play when making the right decision too. If cost efficiency and streamlined operations are your focus, FIFO can help reduce handling time and simplify logistics. But if minimizing waste and delivering the freshest products are your top priorities, FEFO takes the lead.
Notably, you don’t always have to use one method or the other exclusively either. For some supplement companies, the best approach may be to combine the best of both worlds. For instance, if you sell a wide range of products, you might use FIFO to manage more durable goods, and FEFO for items with stricter expiration dates.
Working with a reputable fulfillment company, like Relentless Fulfillment, will allow you to use a combination of FIFO and FEFO inventory management methods easily, depending on your specific goals and product portfolio, without the need for additional complexity.
How to Implement FIFO and FEFO in Fulfillment
FIFO and FEFO are both excellent strategies for shelf life management in supplement industry businesses. However, to really make the most of these methodologies, you need to make sure they’re fully integrated into your entire fulfillment strategy.
Here are the steps you’ll need to take for a successful approach.
Start with Inventory Organization
First, start with the basics. Arrange your inventory in a way that makes implementing FIFO and FEFO processes simple. For FIFO, products need to be stored in the order they arrive. Position older stock at the front and new inventory behind it. This way, warehouse teams naturally pick the oldest items first during order fulfillment.
For FEFO, monitoring expiration dates is crucial. Use your warehouse management system (WMS) technology to keep track of and organize items based on when they’re going to expire. Group products with similar expiry ranges together to avoid confusion, and make sure all of your products have clear labels attached to them.
At Relentless Fulfillment, our WMS technology supports lot control, making it easy to track inventory by arrival date for FIFO, or expiration date for FEFO. That way, you can create a streamlined strategy for managing and making the most out of your inventory.
Implement the Right Technology
Technology is a valuable resource in FIFO and FEFO inventory management. Warehouse Management Systems and tools are critical for keeping a close eye on all of your products, their arrival dates, and expiry dates from one unified environment. They also help you to track stock levels and inventory movement in real time.
Based on the strategy you’re using; take advantage of the various features your inventory management and WMS tools can offer. Set up automated alerts for approaching expiration dates on products to support FEFO. Make sure you can instantly track the dates when you receive products from manufacturers to guide your FIFO decisions.
Use reporting and analytical tools built into your software to track adherence to your inventory management strategies and make sure nothing is slipping through the cracks. Based on your insights, you might even decide to switch from a FIFO method to a FEFO method, or combine the two strategies to further reduce waste.
Work with the Right Fulfillment Partner
Reducing supplement waste with FIFO and FEFO, and making the most out of your new inventory management strategy, is much easier with the right fulfillment partner. A reputable fulfillment partner, like Relentless, will use their experience and expertise in FIFO and FEFO practices to help you optimize your return on investment.
Relentless can give you access to the innovative tools you need to use the best inventory control techniques for supplement brands, and help you keep a close eye on stock movement. Plus, they’ll ensure you can accelerate the delivery of products to your customers, increasing satisfaction rates and ensure long-term customer loyalty. A partner like Relentless Fulfillment can even give you expert guidance on how to organize warehouse layouts, label products effectively, and ensure inventory rotation happens smoothly. Plus, we can assist you with bundling and kitting techniques that could help you to move inventory sitting on shelves faster, reducing the risk of waste.
Discover the Benefits of FIFO and FEFO Strategies
In a fast-paced industry like the supplement sector, where products can quickly lose their value and potency, few things are more important than the right approach to inventory rotation. FIFO and FEFO inventory management strategies can give you an excellent way to maintain product quality, earn customer trust, preserve your reputation, and avoid compliance issues.
With these strategies, you can reduce waste, deliver fresher products to your customers consistently, and keep losses to a minimum. All you really need to make the most out of these techniques is a personalized strategy, the right technology, and a reputable fulfillment partner to work with.
Relentless Fulfillment can give you all of the resources, technology, and expertise you need to make the most of your FIFO and FEFO strategies. With our advanced WMS technologies, bundling and kitting services, and ultra-fast delivery times, we’ll help you stay one step ahead of the competition.
Contact us today to learn how we can help you unlock the benefits of FIFO and FEFO inventory management, and earn long-term customer loyalty.
