While we do not see brick-and-mortar stores phasing out soon, there is no doubt that e-commerce stores are on the rise.
In today's digital age, online stores are extremely popular because it provides convenience. It allows customers to buy what they need without going out of the house. Meanwhile, it streamlines your inventory management Software
Regardless of the size of your retail business, managing your inventory can be challenging. The key to making your e-commerce thrive is knowing how to manage your inventory effectively.
In this post, we will walk you through the nine ways to keep your business booming by boosting your sales and making your customers happy.
Use Inventory Management Software
- Most businesses these days utilize dedicated inventory management software. If not, they are looking for excellent inventory planning services to track, record, and manage their inventory.
- So, even if your retail company is small, inventory management software makes the process more efficient and sustainable in the long run. It also simplifies your inventory management process.
- Moreover, a lot of inventory software has features that are integrated with the point of sale. It helps in inventory tracking, control, and real-time optimization.
- So, every time there is a new order, the software will adjust the available stock for purchase. This is to avoid overselling.
In addition, inventory management software also:
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Displays an analytics report which will outline your most popular products.
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Notify you if you are low in stocks
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Hide out-of-stock items
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Tracks products by information
There are also e-commerce platforms that have built-in inventory management features. Meaning, you do not need to have a third party to manage them.
Follow the First-in, First-out Rule
- Older inventory may be relegated at the back of a warehouse shelf as you order items to beef up your product inventory. This can eventually lead to spoilage of products, or the product will lose relevance to your customers, resulting in a loss in sales.
- Adapting the first-in, first-out (FIFO) rule is a simple way to ensure that older inventory is being sold before the newer ones.
- Many warehouses tend to follow this rule. However, you also need to double-check with your suppliers to ensure that all your older inventory is moving out first.
Set Minimum Viable Stock Levels
- If you already run an e-commerce store, you should set the time to set minimum viable stock levels with every product you're selling.
- Remember that the goal here is to know the lowest possible inventory to meet demands and avoid fulfillment delays.
- In the same way, you should also understand customer demand and the amount it will take to replace inventory that went out of stock.
- When quantities below a specific number you've designated, you can now place a new order in the wholesaler or manufacturer.
- Make sure that you also learn to adjust these numbers over time if you're experiencing growth or a waning demand from customers.
Group Your Stock with ABC Categories
In a nutshell, this inventory system categorized products based on the sales and how much profit they make.
Essentially, they're divided into three groups:
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A Category: Makes up your best-selling items, which usually make up only 20% of your total stock. However, this usually contributes to approximately 70% of your total revenue.
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B category: These are usually mid-tier items and makeup approximately 30% of your inventory and 25% of your sales.
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C category: This makes up the lowest value goods and represents the majority of your stock. However, they're only responsible for about 5% of your total income.
Keeping Safety Stock Inventory
- Safety stock is the extra inventory that you are keeping in case you will need more stocks. It is usually challenging to predict how much the product demand will be. You might be employing different strategies to keep your inventory in check.
- Therefore, having that safety stock will protect your best-selling items from running out. What it does is it will usually save you from an unexpected turn of events. This is also a key metric that you can use if you want to know the best time to reorder.
- Thus, if you do not want to carry too much extra stock either, this might eventually add to the costs of storing your products.
Use the Kitting Technique
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In the same way, you can also put together different stocks and turn them into a deal. This strategy is otherwise known as kitting.
- For instance, those Buy 2 Get one free deal. By doing so, you can get rid of any overstocks in your inventory for a great price. It will also improve your average order value, letting your customers know that they're getting a good deal.
Be Smart with Storage
- If you're collecting stocks, then you need to know where you can physically store the items. Whether you're keeping them in a spare room in your house or a warehouse, make sure that you can quickly locate them.
- Ensure that they're in a place where you can easily pack them and send them to the customer. You might need to move things every once in a while if you have to.
- This also helps you stay on top of your stock and provide more customer satisfaction.
Automate Your Warehouse Barcode Scanning
- You might be processing hundreds or thousands of orders every day. This also means that you're more prone to human error.
- A barcode system will also make it easy to keep track of your product inventory. This improves accuracy and reduces costs if ever an order has been incorrectly packed or shipped.
Audit Your Inventory Regularly
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Doing a regular audit helps you keep track of the products that you currently have.
- By doing regular audits, it is so much easier to maintain control over your products.
Over to You
- You can run your e-commerce business efficiently if you practice sound inventory practices. Doing so enables you to reduce operational costs, boost sales, and make customers satisfied.
- So, if you are not streamlining your e-commerce inventory management yet, now is the best time to do so.
Author Bio:
Juliette Anderson is an Outreach Community Specialist for an e-commerce fulfillment company that specializes in partnering with online sellers who have an average parcel weight of 5+ pounds or greater. She works hand-in-hand with e-commerce stores to achieve optimal sales for four years already. Her specialty lies in social media marketing and paid promotions.
