The nature of online businesses is significantly different in scale and operations to traditional retail outlets and as a result the scale of inventory stock can range from small home storage to vast, multiple warehouses facilities. Regardless of whether it’s a multichannel business, its size or nature of the business, it is essential to keep accurate records and track all the inventory stock items.
Managing inventory can be challenging for any enterprise but here we will discuss the more common factors affecting inventory control relative to eCommerce and provide solutions to more effectively manage your online inventory control.
Overselling inventory stock
Overselling stock is a common inventory control issue particularly during peak shopping periods such as Christmas or Black Friday. For an eCommerce business, it spells disaster when there is insufficient stock in the warehouse to fulfil online orders.
Timely and accurate order fulfilment is crucial to the success of any eCommerce business, meaning that all orders must be dispatched in the shipping time promised. Errors in online inventory control may show that an item is available on your website when in fact the inventory stock has already been sold.
Overselling online often results in the customer having to wait weeks while replacement stock is either sourced or manufactured by the supplier. This can lead to customers cancelling the order and purchasing the goods from your competitors. If an item is listed on your website, it is important that you ensure it is also available in stock. When the goods are not physically on hand, you may struggle to get replacement stock in time, and you are then unable to fulfil customer orders.
eCommerce companies can improve their online inventory control by implementing an automated software solution with real-time inventory updates that allow the business to remove out-of-stock items from online channels and avoid any potential overselling. An automated system will also update the platform once new inventory had arrived in stock.
Inventory management software will also help in determining par levels; when inventory stock falls below par levels you know it is time to order more product.
Spoilage and dead stock
Spoiled stock can be a frequent occurrence for those companies that sell products with expiration dates such as food, beverages, cosmetics or medical supplies and this spoilage represents a lost investment.
Dead inventory stock in contrast, isn’t spoiled or ruined but are those products that are out-dated or out of fashion and may include superseded items such as toys or any products that don’t comply with new safety regulations and standards. Dead stock is often difficult to get rid of, takes up valuable space and is costly to hold.
Know your stock lifecycle and undertake routine inventory checks and turnover ratios to ascertain slow-moving stock items. Cycle counting can be undertaken daily for checking smaller batches, particularly for inventory stock with expiration dates.
Effective supply chain management
When dealing with the ordering and sales of inventory stock it is a good idea to keep track of the entire supply chain. This helps eCommerce businesses to avoid being caught unprepared if changes occur up or down the chain, that lead to supply problems or unreliable order fulfilment.
Mistakes happen when an eCommerce business doesn’t have adequate and organised inventory control that results in inaccurate purchase orders and receipts or when returns aren’t updated to the database.
Optimise your warehouse space by placing high turnover items close to the dispatch area to achieve faster picking and shipping. Ensure that each product is accurately labelled with basic information such as SKU or reference number, price and product-specific specifications.
Other factors affecting inventory control occur when inventory stock information is not updated between different warehouses. An online inventory control system helps to keep inventory stock organised and error-free, product information is updated in real-time and the data is synchronised across all channels.
Lack of communication
Many inventory control problems occur due to a lack of communication between employees, departments and even suppliers. Good communication is vital to guarantee accurate information in the product lifecycle.
Keep the lines of communication open with both customers and suppliers to better manage expectations. On the supplier side, make sure you have a relationship that promotes honest, open communication. You are more likely to be updated in advance if the supplier were to run out of product, raise prices or experience manufacturing issues, allowing you to adjust inventory accordingly.
If an item is out of stock, make sure the numbers on your website are updated accordingly. If a product is recalled, notify your customer in a timely manner. Be honest and upfront about your delivery times, especially during peak-seasons and ensure customers are aware of your refund policy.
Online inventory control systems
It is crucial to provide consistent information across all channels to ensure a strong brand image and improve customer experience. Therefore, implementing a centralised inventory control system is key to your success.
An online inventory control system sends and receives sales and stock information in real-time, to ensure all platforms and channels know what and how much is available for sale at any point in time.
There are many inventory control solutions available to eCommerce businesses and an automated, online inventory control system developed for your eCommerce store offers the best solution. With a centralised inventory control system, you can automate purchasing processes, track inbound orders and accurately track inventory levels across all channels.
It is also important that you schedule periodic audits to ensure everything is current for the needs of the business. Inventory control activities and systems should adapt to changes in demand, seasonal trends, prices fluctuation and changing customer needs to sustain a successful eCommerce business.Topics: eCommerce, inventory control, multichannel