When you are running an e-commerce store selling products online, inventory control can be one of the biggest challenges your virtual business will face. Getting it wrong can cost you a lot of time and money.
Sales growth and business success can be directly attributed to having the right inventory stock available, in the right place and at the right time. It is therefore important to keep track of what you have, where is it and when you need to reorder stock to best meet your consumer demand.
Master the Fundamentals
Traditional brick and mortar establishments are generally better at mastering the fundamentals of demand forecasting, warehouse flow, inventory turns, cycle counting and process auditing, simply because they have been doing it longer.
They understand how overstocking or understocking can adversely affect a business’s bottom line. While the physical nature of these brick and mortar companies makes it easier to see when inventory stock is running low, conventional inventory control methods can also be easily and effectively applied to the management of e-commerce stores.
One such proven method of inventory management that translates from brick-and-mortar to online retail is the ‘First In, First Out’ approach, which makes sure that the items first received into stock, are the first to be shipped. This method is especially relevant when selling perishable products, but is equally effective for non-perishable goods, because carrying inventory poses a greater risk of damage, theft or obsolescence the longer you hold stock.
Using a mix of traditional inventory control methods and modern inventory management systems offers you the best of both approaches and can greatly benefit your online store.
Use E-commerce Platforms
E-commerce platforms are a software application that enable online enterprises to manage their website, sales and operations.
Software systems for e-commerce offer numerous features that include unlimited products and bandwidth, built in loyalty programs, deal of the day options and real-time shipping quotes. Some systems also come with abandoned cart recovery, which sends a reminder to any customer who did not check out.
Integrated inventory control systems will allow you to log on from anywhere, on any device to monitor your inventory stock levels. When you manually enter your inventory stock levels into the admin panel of a hosting platform, the software that runs your online store will reflect stock availability on your website. This allows customers logging into your online store to see what products you currently have on-hand, ready to ship.
Outsource Order Fulfilment
Outsourcing is a successful method of inventory management for e-commerce retail. By outsourcing order fulfilment activities and using multi-channel management software, you can automate your overall inventory control to improve e-commerce success.
Many e-commerce stores use drop-shipping as a retail fulfilment method because it removes the need to hold the items they sell. Using third-parties to oversee packaging and shipping removes the hassle of inventory control. When a customer places an order, the third-party supplier undertakes packing, shipping and customer support.
Manufacturers will largely have inventory management systems already in place. Using your manufacturer as your distributor means they are not just the source of your product by can also handle distribution by delivering products to your customers’ door.
In the highly competitive global market-place of e-commerce, having the right product in the right place at the right time is vital for business sustainability and survival. Whatever your approach, the important thing to remember is that inventory availability has the capacity to positively or adversely affect order fulfilment. This in turn, can directly affect the success and profitability of your e-commerce business.