“We’ve never done it like that before.”
“It would take too long to change.”in
“There’s no proof it would actually work.”
The longer you work in business, the more you’ve probably heard phrases like this. You’ve just approached your boss or partner with a new idea to improve the business, but they’re hesitant to accept it. They’ve got a hunch or a feeling or a gut instinct that is leading their decisions. In reality, we should have data driven decision making in our businesses.
Imagine A Football Team
You can pick whoever your favorite football team is. I’ll personally go with the Carolina Panthers. As the Panthers are setting their roster for the season, do you think they go by gut feelings? Do you think they look at their competitors and just mirror their strategy? Do you think they stick with whoever they’ve used the longest?
No way. Any NFL team who did that wouldn’t win very many games, and any business that operates in such a manner isn’t going to win many sales. The Panthers would look at a massive amount of data as they make their decision, data from training camp, the preseason, and the previous season. Making data driven decisions helps us manage risks, maximize returns, and learn from our mistakes.
But how do we implement data driven decision making into the day-to-day processes of our businesses? Ecommerce data for multichannel sellers can be really difficult to get a handle on. When you’ve got sales flying around on Amazon, eBay, and your own Shopify or Woocommerce-powered website, you’d have to be a data management superstar to keep up with it all. The Elway of Excel. The Bart Starr of bar graphs. For those of us with less than stellar scores on the math section of the combine, there are some easy to learn methods to begin weaving data driven decision making into our businesses.
Use Inventory Pick Lists to Assess the Health of Your Business
An inventory pick list is one of the strongest overall health indicators of your supply chain. It’s essentially an overarching collection of data on your entire inventory. You can view your 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 an inventory pick 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 online inventory system to make sure your inventory is accurate?
Use Sales Order Export Reports to Compile Order Data
This is probably one of the most important data reports that an ecommerce business can have when it comes to data driven decision making. A sales order export report will take all your orders on every channel and compile them into a single report. It’s essentially a full overview of your sales data, important metrics to share with your employees, investors, 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.
- Have your sales orders reached their peak on your current channels? Is it time to expand 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 your biggest buyers?
Use Restock Forecasting Reports to Prevent Sellouts
Restock forecasting is a pretty unique report created by our ecommerce reporting software here at ecomdash, one of the over 40 business reports that can be generated by our system. It takes the average monthly sales of each product, the quantity on hand, and the average time it takes for a purchase order to be fulfilled. With that information, it predicts when you’ll need to make a purchase order and how much quantity your purchase order should be for. Ecomdash customers can also create and email purchase orders directly from our tool with our purchase order management software.
But what data driven discussions can you begin to make with an ecomdash restock forecast?
- Is there an item you’re consistently on the brink of selling out of? Should you dedicate more warehouse space to that item?
- Is purchase order lag dragging your sales down?
- Are you over buying when it comes to your purchase orders? Could you run a leaner operation?
Implementing data driven decision making into your business is an important step to saving yourself money, time, and building the most efficient process possible. These are not at all the only data reports you could possibly use for an ecommerce business, but they are three of the most important.
If you’re a newbie to the data world, get your feet wet with these methods. Plan better, plan smarter, and plan for success.