Whether your company is large or small, online or a brick-and-mortar, inventory is everything. The mismanagement of inventory can cause problems with your supply chain, negatively affect your customers, and end up hitting you where it hurts – your bottom line. The basic principle of inventory management is twofold, and it’s simple:
- You must have enough stock to satisfy demand,
- But not so much that you are sinking too much cash in the process.
Calling this a simple principle is a little bit deceptive. Managing both parts – having enough, but not too much – is a delicate balancing act that even the most veteran of retailers have to pay close attention to.
Key Tips for Effective Inventory Management
Maintaining your inventory effectively across all sales channels, platforms, and access points is essential to the growth of your business. Here are some tips to keep your inventory management system well-oiled and running smoothly:
Keeping your inventory organized may seem like a no-brainer, but it is absolutely vital to the success of your business. Whether you use a bar-code system, inventory management software, or a visual display system, your system must be reliable in the monitoring of stock levels across all of your sales channels. Knowing what you have and where it is located expedites order fulfillment and shipping.
Monitor Real-Time Analytics
This is the age of technology and instant gratification, so customers today expect lightning fast results when they shop online. One-click checkouts, express shipping, and immediate responses are now the normal expectations of shoppers, and you have to be able to keep up or your business could suffer. That is why having real-time data is so important. It allows you to know, at a moment’s notice, when there are problems with your site so you can resolve them before they snowball into bigger problems. Monitoring real-time data will allow you to:
- Identify trends that you may miss otherwise. By monitoring in real-time you will be able to see any unusual customer behavior and take advantage of it as it happens.
- Identify marketing successes by watching referral traffic. When you know where your referrals are coming from you are able to see which marketing methods are working and which ones aren’t.
- Identify the best time to make changes to your site. Real-time data lets you know when your site has the least amount of traffic, so you can update or adjust your website without too much disruption to your customers.
- Identify where you are in relation to revenue goals. With up to the minute data, you are able to see how you are doing in reaching your revenue targets, where you may need to make adjustments.
Never Run Out of Stock
For customers, there is nothing worse than seeing an “out of stock” notice on a product listing. It may mean that they click over to your competitor’s website to buy. If you are going to carry a product, it’s important that you never run out of it. Your inventory management system should prevent this from happening. If it doesn’t, you have to consider changing or updating it to better meet your customers’ needs.
Nurture Supplier Relationships
Ecommerce businesses lack face-to-face interactions by nature, so it is easy to see why some business owners and managers have the tendency to forget that it’s important to nurture relationships with their suppliers. Fostering good communication, cultivating trust, and keeping in non-technological contact will ensure that when issues do arise with stock supplies, your suppliers will be more willing to work with you and make solving your problems a priority.
Choose the Right Inventory Management Software
You can find some excellent software solutions out there that will save you time and money – both your most valuable assets – on inventory management. No matter if you have a small online shop, or a big, multi-channel operation, there is inventory management software that will help you streamline your supply chain and decrease losses.
Some of the considerations to take into account when choosing inventory management software are:
- Synchronization Across Channels: If you are selling on more than one online channel – like, for instance, selling vintage video games on your own online store with WooCommerce plus Amazon and Newegg – you will need to have an inventory management system that tracks product quantities across every channel. If a product sells out on one channel, reserving the last unit in your inventory, you don’t want your other channels to be unaware that the product is no longer in stock. It is crucial that your inventory software syncs product levels across all of your channels to avoid overselling.
- Automated Real-time Updates: Today’s market necessitates real-time updates to your inventory. Your customers want nearly instant order fulfillment and in order to give them that, your inventory management system must have a connection to everywhere your inventory is stocked and fulfilled. As new inventory is received and orders are fulfilled, your inventory management software needs to be able to automatically update inventory so you have an accurate picture of product levels.
- Store Integration: Make sure that the inventory management software you choose has a consolidated view of inventory sold on each of your sales channels. On one screen, you’ll want to be able to view all products (published and unpublished) allocated to each of your stores.
- Warehouse Integration: If you have multiple inventory locations, such as warehouses, drop shippers and fulfillment centers (like Amazon FBA), you’ll want to be able to track inventory by location. As with stores, one screen should be able to display inventory status at each location.
Most inventory challenges can be made easier when you choose the right software for your needs. When you find the best inventory management system for your ecommerce business, it will free up your time to concentrate on growing your business and increasing your bottom line, and that’s the name of the game.