For online retailers, inventory management can be a real challenge, especially as a business grows. Business owners and inventory managers must ensure the stock levels recorded online correspond to the actual physical stock levels in the warehouse; stock discrepancies can have far-reaching consequences.
Inventory management for online retailers can also promise increased profitability if it is done right: by ensuring inventory is managed well, business owners can drive sales and improve the chances of continuing success in the long run.
In this article, we’ll explore how online retailers can increase the success of their business by properly managing their inventory.
What are the challenges of inventory management for online retailers?
One of the biggest challenges of inventory management for online retailers is getting the quantities of inventory right when ordering stock to meet demand. Online retailers can struggle with this if inventory records are inadequate or inaccurate, which can prevent them from making fully informed purchasing decisions.
If the flow of inventory has not been recorded properly, deciding which products to stock up on – and the quantities of each item – can become mere guesswork. This can put online retailers in a predicament where they either an excess amount of inventory or not enough. Being overstocked or understock each have their challenges — too much inventory and you may end up with cash tied up in obsolete stock, but too little inventory and you risk seriously disappointing the customer.
How to avoid these mistakes with inventory management software
The simplest way to avoid the mistakes above is to use inventory management software and implement an inventory management system that will complement their business needs.
By using inventory management software and tools like barcode scanners, you can streamline the inventory management process and reduce time wastage. Further, automating these processes will reduce the risk of human error, and you can be confident that the stock levels recorded online are syncing up with the physical stock levels in the warehouse.
Further, when it comes to ordering more stock for the future, you can instantly pull up information from your database about sales trends and sales history for each product type. This will make you better informed when differentiating between fast and slow-moving items so that you can avoid over-ordering unpopular items and ensure you’re well stocked with the products that your customers really want.
Overall, inventory management software can help online retailers to manage inventory successfully and increase profitability.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.