Quick questions for you.
Do you know how many products are in your warehouse right now? Or how many new products arrived last week? What about this one — the number of products that went out of stock?
No idea! We get you.
As per Upkeep, 75% of all supply chain management professionals want to improve their inventory management practices. This means they are still in the process of learning the rules of the eCommerce game.
Inventory management streamlines your eCommerce business processes. It allows you to sync Etsy inventory, keep your Amazon stock at hand, and also manages re-ordering new stock for new orders.
With thousands of benefits, getting proactive with your inventory management practices will help your eCommerce business to thrive.
What Is Inventory Management?
Whether you want to save money, prevent waste, or reduce costs for your eCommerce goods, inventory management handles all your efforts with the best practices.
Inventory is the goods that your business intends to sell, and inventory management is the process of sourcing, storing, and selling those goods or stocks. It helps you to prioritize your customer satisfaction and control how much stock you have sold, how much you have, and how long you have to keep the remaining stock.
As per Entrepreneur, 80% of a company’s revenue comes from only 20% of the products. Yes, just like the 80-20 rule. And, companies that accept this “80-20 rule” focus on 20% of items.
Benefits of Inventory Management
It’s a no-brainer that inventory management is tied to so many aspects of the eCommerce business. Starting from monitoring different stock levels to the enormous investments that go into managing all these suits.
Upkeep suggests that inventory accounts receivable and accounts payable account for $1.1 trillion in assets. That’s a considerable investment.
But before making any decision, it’s better to understand the benefit of inventory management.
- Increased Transparency: As per Forbes, a survey done on transparent fulfillment processes states that 47% of respondents chose not to shop again with a retailer that has poor transparency or delivery process.
This shows monitoring when the item is received, packed, and shipped helps you understand when you’re overflowed or undersupplied with goods. In a nutshell, inventory planning is crucial.
- Improved Sales: Businesses who actively manage inventory practices reported more sales and conversion rates.
- Lower Costs: It saves your money by avoiding spoilage, better accounting, and enhancing warehouse organization. Also, automatic re-ordering and using inventory software improves efficiency while tracking inventory levels.
- Improved Delivery Rates: Real-time inventory updates helps in making the process smoother and enhances the flow of delivery rates.
- Improved Customer Loyalty: When you improve your brand’s efficiency and accuracy, your customers will trust your brand, eventually improving customer-brand relationships in the long term.
- Increased ROI: Optimize your inventory for goods that sell and keep fewer products in hand for future needs. In short, increase the level of profitable goods.
5 Inventory Management Techniques to Uplift Your eCommerce Strategies
1. Have Safety Stock
Safety stock is an additional inventory you hold for rainy days. It’s best for emergency purposes and helps in saving last-minute manufacturing delays.
To be on the safer side, calculate how much safety stock you would need with the help of your purchase history and sales history. Also, having safety stock removes the headache for weather-related problems or situations like an unexpected demand for any new product.
It acts as a safety net in the inventory management process.
2. Balance Your Inventory
It’s the best money-saving technique and also the most effective one. You don’t want stocks piled up in your warehouse that have zero demand. Having a centralized system that helps you stop over- or under-stocking inventory is the key to balancing your inventory system.
Always plan for demand, set minimum stock levels, and prioritize your products beforehand. Keep your best-selling items on the one hand and the items that don’t sell on the other. The items that remain in one corner and have the least contribution in your inventory cost — eliminate from your checklist.
3. Leverage Kitting Technique
It is a way to organize your warehouse and streamline all other processes. In this process, you collect items that are usually ordered together and create one unit in your inventory.
It helps you organize your inventory, increase efficiency, reduce labor costs, and improve packaging. It also ensures a faster and more seamless shipping process.
4. Keep an Eye on Past Purchases
The past analysis is the key to see things clearly and look at what’s working in your eCommerce business and what’s not.
The product which works best for you, you can store more of that and boost your sales. Also, you can eliminate the stock that doesn’t need much attention and experiment with new products to keep up with your customers’ needs.
This also helps you to determine your engaged audience and target them with services like SMTP relay or mail guns.
5. Be Wise with Stock Storage
Customer satisfaction is of utmost importance whether you’re delivering products 24/7 or in a single day.
This is why it’s crucial to think about the physical storage of items and products. By tracking and organizing your stock room, it helps in labeling the inventory and on-time delivery.
It’s a good idea to check all the incoming stocks and look at the goods’ expiry dates for quality and efficient delivery.
Final Word
To uplift any eCommerce business, your inventory is responsible for both fulfilling and maintaining orders. This means they directly impact your sales numbers also.
Put in place the best inventory management practices. If needed, deploy inventory management software, track real-time results, and leverage them to build long-term relationships with your customers.
