If you run an eCommerce business, then you surely have inventory to overlook. While your business may be digitally-focused, the products you sell are physical and you need somewhere to store them.
eCommerce inventory can be complicated to manage because it’s a tedious process that involves taking in data from multiple sources. Doing this manually is certainly possible, but it will require an employee dedicated to this and that might not be feasible for your business.
A great alternative is to make use of inventory management tools. This involves techniques that you can use to keep better tabs on your inventory and ensure that you always have adequate stock on hand.
To help you manage your inventory better, we’ll explain a few key tactics to implement below.
One excellent technique you can use is inventory forecasting.
If you’ve been in business for a while, then you likely have fairly consistent sales. This means that you have a loyal customer base and often sell the same products regularly.
With this situation, you can reasonably estimate how much inventory you’ll need for any given period. Why not take advantage of this information and use it to ensure that you always have what you need?
You can use inventory forecasting to determine the exact amount of inventory you’ll need throughout the year for each product.
It can also keep track of fluctuations and predict them so that you don’t overstock and waste inventory space. On the other hand, you don’t want to poorly prepare for a month of high demand and run out of one of your best sellers.
Considering all of this, you should make use of forecasting to keep the right amount on hand at all times.
You can also use the method of prioritizing products.
This is also known as ABC analysis. It involves assigning categories to all of your products based on how they affect your inventory cost.
There are three categories; A, B, and C. Category A items are your best sellers, Category C products affect the bottom line but are relatively insignificant, and Category B is anything in between.
With this in mind, you should have 80% of your inventory costs coming from Category A. You want just 5% from Category C, leaving just 15% for Category B.
If your ratios don’t reflect this, then you should make changes to readjust what inventory you have on hand. Assigning product priorities is vital for keeping only relevant inventory in your warehouses.
Another tactic for inventory management is to centralize it.
Depending on the size of your business, you might sell on several different platformsdifferent platforms. This will involve many virtual shops and inventory levels to keep track of.
With everything scattered around, it can be difficult to stay on top of it all. This can lead to scenarios where you oversell a product because you didn’t update stock levels from one platform you sell on.
With your management centralized, you can seamlessly keep stock levels in sync. A sale on one platform can adjust stock levels on other platforms, meaning that you’ll never run out of stock.
Inventory Management Software
Arguably the greatest strategy for inventory management is using software designed for it.
All the techniques mentioned above are great ways to approach inventory management and can help you keep a clear pulse on your inventory levels.
With a great inventory management software solution, you’ll have access to all of the tactics mentioned above in one place. Software will automate most of the processes and ensure that everything is done accurately.
This leaves less room for error and creates a more efficient inventory. You can seamlessly keep stock levels connected across platforms and create alerts to order more based on preferences that you set.
Many manual processes of inventory management are unnecessary and time-consuming, so having it completed by software will free up precious manpower. Software keeps everything running effectively and gives you more time to analyze data, leading to better results.
Any eCommerce business will need to closely follow their inventory and this can get demanding when you sell at a high volume. To ensure that you never run out of stock for critical items, you need a strategy for inventory management.
A few techniques for this include inventory forecasting, prioritizing products, centralizing management, and using an inventory management software that can do all of this for you.
With strong inventory management, you can easily streamline this process and make it more effective. The consequences of poor management are disastrous, so you need to take control to make sure everything runs smoothly.