With this, e-commerce website owner save their investment from inventory. When any seller see the bought item on same website. They have made their business model in such a way. Every seller maintain their stock in same website whether it is amazon or flipkart. They just have given the login id to sellers. For example, all big e-commerce websites are following zero inventory technique. If supply line is so near, we need not buy and storage. Whether we should use or not use zero inventory, we should take the help of accounting records and current situations.

With this, our overall worth will increase. With this, our goodwill will increase in the market. We can use same cash inflow for buying good on cash for selling. Same cash inflow, we can use for paying other important expenses. With zero inventory in hand, we can get more cash inflow. Same investment, we can invest other sector and grow our business. So, it is the wastage of our big investment. For example, we have bought the stock of $ 10,00,000 but whole one year, we could not sell. Only supply or produce on the order, we can save our investment from inventory. When we have decided not to keep any stock. There are two benefits which are associated with the zero inventory technique.

So, some produced inventory is necessary everytime for supply to customers. For example, there is shortage of laborers.

If you are producing your own stock, production may be delayed due to uncontrolled factors. If you do no use zero inventory, you can supply without delay. So, this is risk of your loss of your overall return. Due to this, you can lose your customer forever. There are two risks which are associated with the zero inventory technique.įor example, there is big distance between your supply line and actually delivery point, then, there is risk of delay in delivery. In simple word, to keep zero stock for selling purpose will be called zero inventory. Zero inventory is the technique which is used by businessman for reducing the cost of inventory and increasing the cash flow.

Zer inventory sheet