So you’re excited! After months of figuring out costs, making plans, and putting in all the effort, you’ve finally set up shop. You’re starting and running your own e-commerce business. Or you may have already had an e-commerce business set up for years.
Either way, there is one key aspect in a retailer’s life that doesn’t always receive the traction it needs: figuring out how to utilize inventory management methods to make your business the best that it can be.
At its core, inventory management is the process of sourcing, storing, and selling stock. It’s all about knowing how much stock you have, how much it should be selling at, where to keep it, and how long you should keep it for.
Inventory management is crucial for every business, no matter how large or small. Doing so will prevent waste saves cost and time. Keeping on top of supply builds more customer focus since it provides people with the products they want.
However, many businesses still lack knowledge about inventory management best practices. Even the most prominent firms and companies collapsed because they failed to use the proper techniques and systems.
Your inventory might contain different items and goods, depending on what type of store or business you have. Here are items and categories that you can track, which you can include in your inventory:
- Goods: Goods are all finished products in stock. Similarly, this includes different variations of the products you have in stock.
- Materials: This is made up of items and materials used to produce goods.
- In Production: A category that includes products that are currently under development.
- Items in Transit: Products, materials, and goods that are important from various distributors, factories, and overseas.
- Returns: Returns are items that your customers returned. It may include items or materials you return to manufacturers.
Now that we’ve walked you with the basics, here are some essential pointers that ensure that your e-commerce store stays on top by creating the right inventory management system:
- Setting up and organizing your products
One of the initial steps you need to take for strong stock management is to set and sort out products in the e-commerce framework you’ve chosen.
There’s also something entirely to it than just creating a standardized tag and creating a name for every product. Think about the characterization that bids well for your business.
Automation helps you use various assortments to sort out products on the value, seller, and stock level. Similarly, there’s also no restriction on the amount or kind of products you can set up and sell on your ecommerce store.
- Keeping your website updated
If you run out of a particular product, then it’s vital that you immediately update your site. If customers place orders, pay for these items, and do not receive them on time, they might switch to your competitors instead.
You might want to get a cloud-based inventory software that automatically updates your site. However, you might want to place fail-safes in place to ensure that it’s reliable.
You might also want to consider adding information on your site that states when you expect your product to get back in stock. Similarly, you might want to consider taking backorders with a promise to fulfill them during a certain date.
- Upgrading inventory management software
An inventory management software is specifically tailored to make you manage your inventory better.
Note that most inventory management software is cloud-based, so there’s really no software to install, and multiple users can access the software, and make changes on it, anytime.
This system allows you to streamline the inventory tracking process, which promotes and maintains accuracy, simplifies the documentation process, cuts down paper usage, and helps you save time.
- Cross-supplier product listings
Also known as Multi-Vendor Listings, it means that you want one product listing to be fulfilled by multiple vendors or suppliers. This might add another layer of complexity. That’s why you need to place an e-commerce software in place for you to do this kind of inventory management.
This extra “layer” is also known as the listing. Rather than having a one-on-one relationship with the product or listing, a specific product listing can now be fulfilled by different suppliers with various quantities and product costs associated with it.
You might consider adding another layer of complexity to advertise the listing on different social media platforms like your online store, Amazon, or Google Shopping.
- Building inventory management strategy
There are three main aspects to creating an inventory management strategy that works well for your business. Building an inventory management strategy includes organizing, forecasting, and auditing.
After you’ve built these core processes, you can create a much smoother fulfillment operation, as well as a more reliable inventory and sales report.
First, you need to define what product categories you’re selling and then organize them into categories. Let’s say that you’re selling clothing and accessories.
You might want to place all apparel into a single section, jewelry in another category, and so on. You might also want to organize them into subcategories.
Inventory forecasting helps you prevent inventory shortage or excess. A vital tool that you can use is an inventory management software to analyze historical sales data.
You might also consider other factors such as seasonal trends and timing your marketing efforts when it comes to predicting demand.
It would help if you also practiced doing regular audits in your inventory.
At its core, inventory auditing is the process wherein you count every unit in your inventory to help you confirm that it matches the current quantities in your inventory management software.
So there you have it. No doubt, having an excellent inventory management system in place allows you to do your work a lot easier.
Using the right mix of these strategies and the right software allows you to keep on top of your inventory, resulting in more profit in the long run. Good luck!