With consumers demanding quicker turnover and a larger product range, the online retail industry has to keep up with much more complex customer needs than a decade ago. Managing inventory well is essential for reaching customer expectations; let’s look at some easily achievable ways to get closer to best practice inventory management.
Keeping data up to date
For firms that use a manual stocktaking procedure, issues around up-to-date stock availability data is a common occurrence. The key issue with manual data is the lack of real-time information, which can lead to inaccurate forecasts and stock outages. Online retail stores are expected to always have their displayed products available for immediate purchase, and therefore it is crucial to ensure stock levels are adequate. With outdated data, this cannot be ensured.
Using online inventory management systems can enable real-time tracking of stock levels as well as set accurate forecasts of future demand. To continue building a successful business, management must know where products are being stored, how long it takes to pick, pack and ship products. The easiest way to do this is to keep data as updated and transparent as possible, meaning forecasts and planning can be reliable.
Online retailers often gain the most revenue from existing platforms such as Amazon. These third-party warehouses act like a middle-man and handle storage, packaging and shipping. By outsourcing this segment of business, stocktaking procedure becomes slightly easier to handle.
The consequence of using this sort of distribution method is that brand recognition suffers. Specifically, with Amazon, company logos and other details are not displayed, meaning less product-company affiliation. However, the benefit of outsourcing fulfilment is the quality of techniques. With a third-party taking charge of boxing, shipping, and customer support, there is less pressure to perform all aspects of business, especially if your company is still in the smaller stages.
Another option, is to use your manufacturer as your distributor. This reduces the quantity of stock you have on hand, and with direct shipping to customers, reduces costs. In this case, manufacturers tend to have their own stocktaking procedure, and a balance of your company order will ensure inventory levels are taken advantage of. While it may save money by buying large quantities, it is important to remember that the stock must still be sold to make a profit, and that because it isn’t visible doesn’t mean it is free.
Online retail has the advantage of not requiring products to be on display or hidden in a storeroom. This means that there is more opportunity to get personally involved, allowing for better observation of stock quality, demand levels, and what needs to change. Observing inventory levels while the business is still on a smaller scale is the easiest way to reflect on what needs to change, however once your business starts growing it will become increasingly difficult to handle the entire stocktaking procedure yourself. Being aware of stock levels and future demand is essential for maintaining progress and success in a growing business, particularly when customers expect fast turnarounds.
Meeting industry standards
For specific industries, general benchmark standards must be reached. For online retailers, this could include health and beauty products, branded goods, homeware, or perishable objects. Keeping up to standard ensures that your business is in competition with others in the industry.
In trying to keep up with industry standards, it is easy to overlook the need for reliable inventory management and stocktaking procedure. By ensuring adequate inventory management, additional information such as product tracking, batch dates and quality control can be integrated and offer a clearer picture of what is available and when products no longer meet industry standards.
For online retailers, strong inventory management is an essential aspect of maintaining a competitive edge. By comprehensively understanding what stock you have available, keeping updated data, complying to industry standards, and outsourcing segments of business to others, inventory issues can be kept to a minimum and your business can continue to grow.