Inventory Control Tips And Tricks in eCommerce RetailingAuthor : Mohammad Ali , Founder and CEO of Inventory Software Services
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eCommerce retailing is just not about creating a stunning website or promoting the site on social media. Proper inventory management is key to eCommerce success. This activity involves keeping optimal amount of products in the stock. It is the process of ordering, storing and utilizing raw materials or finished products. Mismanaged inventory often leads to financial loss. Inventory management becomes more difficult for eCommerce stores as they have to handle customers across multiple channels.
How to ensure that the right amount of inventory is maintained? Let us checkout some inventory control tips and tricks for eCommerce retailing suggested by the experts of TrueGether, one of the marketplaces similar to eBay and a multi channel retailing platform for sellers.
Maintain a separate list for core and non- core products
Core products are those without which the business will not operate. Non- core products are the other goods which are generally used by the company. For example, during Christmas an eCommerce site will get more sales from cakes, Halloween costumes, Christmas- themed jewelry. So these become core products during the season. So in eCommerce retailing it is very important that inventory is customized according to the season. This will ensure that supply and demand of goods are balanced.
Follow Just in Time (JIT) Inventory Management
This is a very effective inventory management strategy. Just in Time inventory management aims at reducing inventory waste and increasing efficiency. If you have large amount of inventory the cost of storage increases. Just in Time inventory management means stocking the right amount of goods at the right time. How to do this? The eCommerce site should have excellent forecasting skills to adopt this strategy. They need to predict the prospective sales number, demand of specific products and also periods of fluctuations.
Have a centralized inventory management system
Besides great analytical skills, the company should also have an advanced inventory management system in place. This kind of application gives information about the demand and order of goods on real time basis. It is always advisable to choose a customized inventory system. The inventory system should be in sync with the warehouse, shopping cart and the bookkeeping application. This will automatically reduce the count of the product from the inventory once it is sold. There are special mobile applications available. These apps help the traders accept payments and keep track of the inventory on the go.
Ensure accurate forecasting of inventory
As already stated, accurate forecasting of demand for goods is essential for proper inventory management. When the eCommerce site is aware about what customers need and at what time, they can manage the inventory properly. So how can you improve the forecasting skills? Market research, observing market demand models, analyzing demand patterns will help eCommerce companies identify required stock levels.
Run a physical check
Last but not the least; there is no alternative to manual checking of inventory. Visit the inventory or store room at regular intervals and check the number of products. Sellers should always remember that it is most frustrating when a customer chooses a product but is unable to buy it. ‘Out of Stock’ is the last word buyers want to come across. On the other hand, ‘Abandoned Shopping Cart’ is the last word eCommerce retailers want to hear.
Have backup suppliers
As a business you are dependent on lot many other businesses, that is, on the suppliers. So if you are dependent on one supplier and that company goes on a strike, your business becomes standstill. You never know when you get a bulk order. For this reason have some backup suppliers who can fill your inventory during exigencies. Ideally, an eCommerce retailer should have suppliers located at different cities or ones who receive goods at different ports. This will ensure that local issues do not impact your inventory.
Avoid the following mistakes
There are few common mistakes in inventory management which any eCommerce retailing should avoid. Overordering
Once you commit to provide the product to the customer you must keep the promise. Providing the product on time is key to eCommerce success. Sometimes the sellers fail to keep check on the inventory. There can also be an error in the inventory system which shows the product as available to the customer when it is actually unavailable. Customers might cancel the order after such incident, move to competitor website to buy it or upload a negative feedback. For this reason, it is utmost important that eCommerce retailers keep a track of the inventory. Instead of blindly following the application, they should sometimes investigate whether it is working properly or not.
This error occurs when you are selling across multiple channels. If the inventory system is not integrated with all the selling platforms, there can be a major issue. Online stores are open round the clock. This means, sales can take place at any time of the day; even when you are sleeping might be your products are getting sold! So it is important that the inventory system is smart and fast enough to update the product availability.
Training the staff is an important part of inventory management. Just getting a modern inventory application is not enough, your staff must be able to use and read it properly. Online retailers often ignore this fact. Arrange a small training when a new inventory system gets implemented. This can save major human errors and also ensure that the system is utilized to its optimal level.
Yes, the business is online. This does not mean that you need not invest in relationships. As suppliers are the backbone of eCommerce retailing, keeping them happy is important. Reasonable and respectful interaction with the suppliers will help you get the necessary products even when there is a scarcity in the market.
Conclusion : So follow the above tips and avoid over stocking of unnecessary products. Inventory management ensures that the right quantity of goods are purchased. If the inventory contains the required number of products then the business can run without any hurdle. Inventory management is an important activity, both for eCommerce retailing and brick and mortar retailing.