You know the warning signs when you’re getting sick. You feel a sore throat or stuffy nose, you know something’s wrong. But how well can you recognize the warning signs that your ecommerce business is “sick”? If your store’s inventory management system is in danger and needs help, could you save it before it’s too late?
Whether you want to stop problems early or just streamline your operations, learning what to look for is the first step. Here are the 5 biggest warning signs of inventory management trouble.
Multichannel ecommerce is a double-edged sword — you reach more customers, but have to put in more work. The riskiest aspect is usually stock levels; whenever you make a single sale on one site, you have to update that product’s inventory levels on each and every other site.
Miss one, and you open yourself up to overselling, when customers buy a product that’s actually out of stock and you have to cancel their order. That’s even worse than an out-of-stock message because you likely lose that customer forever, to say nothing of the bad reviews they’ll write.
But unhappy customers aren’t even the worst scenario. Amazon and other channels can kick you off indefinitely for overselling. With your business frozen, your only recourse to get reinstated would be through a legal battle. Overselling may be an innocent mistake, but it comes with some nasty consequences nonetheless.
2. Missing Inventory
The more products you offer, the harder they are to keep track of. It’s difficult to maintain 100% accuracy with all your inventory, but the farther away you get from that number, the more money you lose to organizational errors.
Missing inventory could be the fault of a warehouse worker, but more often than not it’s due to operational mismanagement. Maybe it’s your naming conventions or how you use SKUs, maybe it’s your retrieval procedure, or maybe there’s a miscommunication between processing the orders online and fulfilling the orders offline.
Here’s an example of what your unique product SKU should look like:
Either way, if you lose track of your inventory, you lose more than just the value of the item — it throws off your analytics and threatens to anger customers with shipment delays.
3. Lost Time on Data Entry
As most ecommerce managers already know, selling online involves more than just selling. Depending on the perfect business model for your store, you may also have to worry about where to source products, crafting them yourself, or branding white-label goods to make them your own. But one of the most common secondary duties is data entry: keeping your online site and product pages up-to-date and optimized.
Data entry is the model example of “busy work.” Tedious and often brainless, tasks like updating product quantities or populating new channels take up a lot of time — time that you could use on more productive tasks. As with missing inventory, the more efficient your inventory management workflow is, the less time you spend on such menial tasks. And as we all know, time is money.
4. Storage Fees on Stagnant Items
Every vendor knows what it’s like to have an item that doesn’t sell. That’s just a part of retail and sales in general. But if you have too many items that don’t sell, and they start eating up your inventory overhead costs, that hurts your business. The money you could be spending on advertising, upgrades, or new products instead goes to “monthly rent” on storing dead weight.
Below is an example of what kind of fees you could be facing when your items lay stagnant in a warehouse:
Unfortunately, this particular inventory management problem is easier to avoid with foresight than to solve in hindsight. Proper inventory management gives you an accurate idea of how many products you sell in a given time, allowing you to forecast sales numbers and optimize how many you need in stock. If you run a tight ship, you’ll always have the perfect amount of stock on hand — the ideal balance between meeting demand and minimizing storage costs.
5. Irregular Restocking Schedules
If your inventory management were perfect, you’d never post an “out of stock” message. In such a well-oiled machine, you would reorder new stock just in time before the old stock sells out, ensuring that you always meet demand and never pay too much for storage.
That’s a lofty and hard-to-achieve goal, but with a proper inventory management strategy, you can come close enough. Knowing how much stock you’ll need in the future, or determining your brand’s seasonality, and reordering products at the right time can directly impact both sales and storage fees.
If you’re reordering stock irregularly — in other words, whenever it “looks low” — then there’s room for improvement. Efficiency equals profits, so maintaining a fixed schedule (and accounting for seasonal changes) is best for your bottom line.
Solutions: What to Do If These Warning Signs Appear
If you’re familiar with one (or more!) of these warning signs, don’t fret. It’s not too late to correct these inventory management troubles and stem their damage before it becomes serious. Even more good news is that you can fix each one of these just by implementing inventory management software like Ecomdash.
The 5 issues above are all solvable problems. By using Ecomdash’s advanced software, each of these issues can disappear through no extra effort on your part:
- It automatically updates your stock levels in near real time on all your channels, ensuring that your listings are always current, therefore helping to eliminate the possibility of overselling.
- It tracks your inventory and standardizes your organization methods. The only inaccuracies come from human error.
- It analytics lets you easily see how many products you’ve sold in a given time period, so you can optimize the amount you order; never too much and never too little.
- It allows you to both manage all of your listings from a single dashboard and use batch updates on all your channels at once.
- It sends you time-sensitive restock alerts to get an early start. You never have to worry about noticing low levels in time to reorder.
As you can see, there are many benefits of inventory management software. If it sounds too good to be true, you don’t need to take our word on it. Click here to try your free 15-day trial now, and see for yourself. No credit card needed!