The longer you’ve worked in business, the more you’ve probably faced opposition and uncertainty from others around you. When approaching your boss, partner, or colleague with a new idea to improve the business, they’re often hesitant to accept it. Why?
In most cases, the reason for the skepticism is due to your “hunch” or gut feeling and not actual data. Business decisions should be made based on facts and evidence of relevant data.
Making data driven business decisions helps manage risks, maximize returns, and learn from past mistakes. But how do you implement data driven decision making into your businesses? No matter your level of expertise, here are some easy ways to begin implementing data driven decision making into your day-to-day business.
Use a Physical Inventory List to Assess the Health of Your Business
A physical inventory list is one of the strongest health indicators of your supply chain. This list is essentially an overarching collection of data on your entire inventory. You can view quantity on hand, the quantity you have committed, total on shelf, warehouse, aisle, bin, warehouse quantity, and the quantity of open purchase orders you have for each SKU.
Here are some of the decisions you can make with the data gathered from a physical inventory list.
- Do you have the inventory to expand to multiple warehouses?
- Should you temporarily delist any items based on low inventory?
- Should you consider investing in an inventory management system to make sure your inventory is accurate?
Use Sales Order Export Reports to Compile Order Data
A sales order export report is one of, if not, the most important data report an ecommerce business can have when making data driven decisions. It takes all of your orders from every sales channel and compile them into a single report. It’s essentially a full overview of your sales data, which are important metrics to share with employees, investors, and/or partners. It should include the cost of each product, quantity, shipping amount, customer information, and profit margin.
There are a couple of important business thoughts you can assess with this data.
- Should you consider expanding to a new marketplace?
- Which items have proven to be unprofitable?
- Which items are your biggest sellers? Should you reserve more warehouse space for them?
- Which of your customers are consistent buyers?
Use Restock Forecasting Reports to Prevent Running Out of Stock
Restock forecasting is a great report for online retailers. This report takes the average monthly sales of each product, quantity on hand, and average time it takes for a purchase order to be fulfilled, and predicts how much to order and when to place the purchase order. Ecomdash customers can access this report within their dashboard and also create and email purchase orders directly from our purchase order management software.
But what data driven discussions can you begin to make with a restock forecast report?
- Is there an item you’re consistently selling out of? Should you dedicate more warehouse space to that item?
- Is purchase order lag dragging your sales down? Do you need a new supplier that ships faster?
- Are you buying too much inventory when it comes to purchase orders? Could you run a leaner operation?
Implementing data driven decision making into your business is an important step to building efficient processes. It saves money, time, and frustration. There are countless data reports available to ecommerce retailers, and everyone has different preferences. At the end of the day, use whatever methods work best for you and your business.
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