The increasing popularity of e-commerce has unlocked a lot of potential for would-be entrepreneurs. The ability to concept a product, easily create a storefront and market that product effectively to a segmented audience has opened the door to crafting a successful business for those who otherwise might not have had the required resources.
But as entrepreneurs like you get their businesses running, they may run into an issue that commonly affects home-based businesses: inventory management. How can you streamline your home-based inventory management processes and optimize efficiency for greater success – all from the comfort of your home?
In this article, we’ll dive deep into inventory management strategies for remote businesses, taking a look at space utilization, cost management, and inventory management solutions that add value.
Space Utilization
When you’re just starting out, as you assemble or receive your goods, chances are the most likely place you’ll be storing them before fulfillment is the same place you work – your home. This works rather well for small e-commerce boutiques or craft-on-demand businesses, where the amount of goods you’re working with is relatively small. But for businesses that handle a greater volume of product, or businesses that aim to expand into higher production, this method isn’t sustainable.
Fortunately, there are strategies that you can leverage to better use the space that you have – or, if necessary, work outside of it. These inventory management strategies are:
- Just in Time (JIT) management: JIT inventory management is very similar to print-on-demand, requiring you to order only the inventory you need to fulfill already placed orders. However, JIT inventory management can be slow-going, easily delayed by supply chain errors, late deliveries, and higher delivery costs.
- Dropshipping: Dropshipping allows you to hand off inventory management to a third-party vendor. When a customer places an order, that order is immediately sent to a fulfillment partner, who then ships the order themselves. Outsourcing this process allows you to focus your efforts on marketing and sales; though choosing this method requires you to select a shipping provider you can trust.
- Third-party logistics (3PL) providers: Similarly to dropshipping, using a 3PL allows a third party to handle inventory management; unlike dropshipping, 3PLs also handle returns, inventory storage, and occasionally even product assembly. For businesses looking to scale in the future, this bigger-budget option is a necessary step to expand their storefront’s reach and efficiency.
Any of these methods will work, but not all will work equally well for your home-based inventory management. Choose the one that works best for your business model and your budget, and you’ll be able to fulfill orders more consistently; a massive boon for customer satisfaction.
Cost-control
The cost of integrating your home life with your work life often saves you money on your commute; but not so much your power bill. Managing and storing inventory from your home with inventory management solutions can require a lot of power, especially if you’re working with perishable goods or inventory that requires dedicated storage areas. Finding a way to optimize your processes to minimize costs is therefore paramount, as you don’t want your home office to be a source of significant revenue leakage.
After auditing your at-home inventory storage systems to assess current power usage, consider any of the following:
- Energy-efficient infrastructure: Start by assessing your home’s energy efficiency. From lighting options to temperature control solutions, there are a variety of electrical appliances that are designed to consume as little power as possible, while also serving their main purpose. Older infrastructure can consume more power than is needed to serve the same function, negatively impacting your operational costs.
- Insulation and heating reworks: Worn-down insulation doesn’t do its job half as well, causing your temperature control systems to exert more energy than necessary to accomplish the same task. Installing new insulation, window seals, and smart thermometers can be great ways to keep your temperature consistent while using less energy overall.
- Renewable-resource power: Home-based E-commerce businesses are among those that can benefit from renewable energy, the price of which has dropped by 36% over 5 years. Homeowners across the country are switching to solar power, and it isn’t hard to see why. It’s a cost-effective choice to power your business and potentially save you over a thousand dollars per year in operational costs.
Using any of the above strategies will likely not only cut down on operational costs, but the average cost of living in your home. Saving money on both fronts allows you to reinvest more into your business, fattening up your bottom line and providing you with an extra layer of security.
Remote-management software
Finally, we get to the technological component. New AI-powered inventory management solutions can streamline your back-office processes with automated support, providing optimized inventory data in real-time. When using this software, you and customers alike will always know what’s in stock, facilitating easy processing and fulfillment of orders.
Technological solutions like these are not necessary in the early stages of your online business; but as you expand and your quantity of orders increases exponentially, they’re invaluable. A high-level view of inventory data that can be zoomed in on for granular insights into production empowers you to make strategic decisions regarding inventory investment and output.
We hope this brief primer gave you everything you needed to know to streamline your own home-based inventory management processes. Inventory management is often a pain point for new entrepreneurs; but with the right framework, it needn’t be a bother. Utilize the tips above, and you’ll be consistently fulfilling orders that make your customers smile.
