Inventory management is a struggle for many ecommerce business owners. Between shifting demand, the challenges of storing inventory in a remote location, and the expectation from customers that products be delivered as soon as possible, it can be quite overwhelming. The good news is that there are practical ways for you to enhance inventory management in a cost-effective fashion.
The Push for Better Inventory Management
Few things matter more to your overall success as an ecommerce business than effective inventory management. How you approach this aspect of your business will directly impact sales, marketing, customer service, and everything in between.
Overselling is a big issue, as it leads you to break promises to customers. You either have to cancel an order and tell a customer that they can’t have something that you said was available, or you have to tell them that there will be a lengthy delay before they receive the product.
Over-ordering is equally as bad. While customers may not notice, you end up overcrowding your stock rooms and restraining your budget. This affects the internal workings of your business and creates headaches in every department.
By prioritizing inventory management and making accuracy a big focus, everyone in and around your organization will notice a positive difference.
3 Practical Tips
What does it look like to actually address your inventory management issues and make this a strong point of your organization? It may take years to fully revamp what you’re doing, but here are some simple, yet practical tips.
- Choose the Right Software
The right inventory management software makes all the difference in the world. While there are lots of different vendors and platforms on the market, you want one that allows for comprehensive visibility in a single platform – such as Sellbrite (among others). This is especially true if you sell via multiple websites, as it’s easy to lose track of inventory when there are multiple systems involved.
- Understand Seasonality
Almost every ecommerce company has to work against some sort of seasonality. Some companies – such as a holiday decorations website – may deal with more drastic shifts and demand than others, but very few companies are totally immune.
The best thing you can do is start tracking numbers. The more numbers you can track, the more accurate your planning will be next season. Furthermore, you can’t set your inventory and then sit back and watch. Even if demand is cyclical, you have to be ready to step in and tweak some levers when numbers don’t add up.
- Manage Returns Effectively
One of the biggest inventory issues ecommerce companies have involves returns and exchanges. Between getting the item back and restocking it to refunding and/or replacing the item, it’s easy to get things mixed up and get your numbers out of alignment. A good inventory management system will automate this process, but make sure you’re cognizant of the fact that this is an issue and look out for signs that something has gone awry.
While you want your return policy to be customer-centric, there’s something to be said for also having a retailer-centric policy. There’s a delicate balance here, so be careful in how you proceed.
Where Can You Improve?
When you look at your ecommerce business’ current approach to inventory management, where do you think you can improve? Sometimes the problem areas are immediately evident. Other times, you have to do some digging in order to identify the culprits.
Regardless, there’s always room for growth. Spend some time studying your inventory management and implement some of the techniques highlighted in this article in order to push your business in the appropriate direction.