7 best practices to take care of inventory management for your online store. Follow these to setup a smooth supply chain for your ecommerce business. Get a robust inventory management software for your online store that helps you manage purchases, stocks, documentation, stock keeping, etc and automated routine tasks like generation of purchase orders and invoices.
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7 Ecommerce Inventory Management
Best Practices You Should Follow
For an ecommerce business to succeed amidst the increasing competition, there
are a few central things which should be managed proficiently. Among these,
proper Inventory management is vital to the smooth running of a business.
Choosing the products you want to sell, and setting up a proper business model
to source products and a way to make them available to customers is an
important part of any business.
But how do you manage your inventory? What are the aspects you should take
care of? Not every business owner is an efficient supply chain expert and hence,
need guidance on the same. The first step in the right direction in this regard
would be to get a robust inventory management software for your online store
that helps you manage purchases, stocks, documentation, stock keeping, etc
and automated routine tasks like generation of purchase orders and invoices.
But even to get the best out of any software you should know how inventory
management is done. Here’s a list of 7 ecommerce inventory management best
practices that will get you started.
1. Priority Stock Up
To ensure that your best selling items are never going out of stock, you should
regularly check that they are enough in stock to ship to the next customer.
Going ‘out of stock’ for the popular products on your site can be destructive for
your business. Other products which might be seasonal or shows one or two
sales now and then can take this for once, but high priority merchandise should
be reordered immediately after the product is ordered by a customer (not
waiting for the actual shipment process.
2. Drop Shipping
Drop shipping almost means that you never run out of stock without even
having a physical inventory. What merchants do is take up the order and engage
drop shippers to pick up the product from the supplier, pack it, and send it to
the customer. The customer needs not to know if any third party had been
engaged in the transaction. This also doesn’t come to be hassle- free. You need
to continuously sync in with the shipper for updates regarding inventory, order,
and delivery. You can then convey the order status to the customer. But it’s
worth the effort. It also allows you to offer a huge array of products to your
customers and enhances customer satisfaction.
3. Immediate Inventory Updates
You should keep a close check on your inventory. As soon as a product is sold,
you should get the space refilled immediately. Don’t postpone it to a certain
time after sales, your next order could be in another half an hour, so keep
yourself geared up for that by having immediate updates and take quick actions
by sourcing that product at the earliest. If you fail to do so, it’s not good for your
businesses revenue sheets. If your site shows a certain product is in stock and
the customer is later informed about the unavailability, you might lose the
customer for life.
4. Cross-Platform Inventory Management
If you are selling across platforms, you need to be more vigilant with your
inventory. For separate channels, manage different warehouses and inventory
records or you might end up messing it. If a product is out of stock and any of
the channels fail to update it, a customer might order the product and you are
left with no option but to inform them later that it’s out of stock. Therefore, you
must make it a point to handle all channels efficiently. You can also take help
from ecommerce inventory management software which helps you integrate
the channels and manage the inventory.
5. Managing Variety of Products
Stocking up your inventory timely gets more difficult when you are dealing in
variant products. It can be easy to stock up items like books or kitchen
accessories, but the same goes complicated when you are dealing in apparels
and footwear. That’s because you don’t just need to refill a particular design or
color for apparels or similar items, but different sizes as well. A proper and full
inventory means having all the sizes, in all designs and colors ready at any
moment. So, if you are dealing in businesses like these, it would be difficult to
keep a check through the e-commerce platform and will need a proper
inventory management solution to ensure that your stock is updated.
6. Kits and Combos
When you are offering products as individual items and as a part of combination
sets as well, you need to keep a check on these products. If any of these
products go out of stock individually and you don’t take heed, you might not be
able to ship the kit/combo on time and that’s definitely not good for your
business. You can also engage in partnership with a third party to manage
responsibility for collecting the combination products from different sellers,
pack it, and ship it. Your inventory remains intact and your customer satisfied.
7. Calculate Re-Stocking Time
Managing an ecommerce store means sourcing products or raw materials from
different sellers and further putting them up on sale. When you are sourcing
products from different sellers, you should know in advance of the time they will
take to send out certain products. Note that they are actually re stocking the
items within that time period. Synchronization with your sellers is as much
important. When you know how much time is required for you to get a product,
you can plan to restock your inventory accordingly. If you are ordering raw
materials, you need to speed up a bit as it takes time to get the final product
that is to be shipped to the customer. So, calculate the average time it takes to
restock a product and plan accordingly.
Though it is true that it’s not easy to run a hassle-free business, but it is certainly
not impossible. If you align your strategies properly with the day to day activities
of your business, the sail will be much smoother. If you once get a formula
which works fine for the kind of products you deal in, your inventory would get
much easier to manage. But as no particular thing fits for all, you need to come
to that stage where you have discovered it yourself. Once you know how buying
and selling goes swiftly for your e-commerce, you can follow it to grow your
business further and generate more sales and revenue.