Online businesses these days are convenient, popular, and easy to use for both consumers and sellers, and this is one of the reasons why anyone can start an online store easily. However, it is also a challenging business to succeed in, especially when there are so many competitors. Nevertheless, even in the same industry, they all have different ways of managing inventory, so it is necessary to find a way to manage inventory efficiently for each workplace. Usually, when a customer orders from a start-up business, they purchase and deliver goods immediately. This method does not put a strain on inventory, however, as the number of orders or sales increases, there will come a moment where you can no longer operate an online shop by reordering, and you might wonder if there is another way to do this.
In this post, we will discuss 5 basic tips for better inventory management to increase sales and have a successful online business.
5 Tips to Effectively Manage Inventory for Online Stores
One of the most effective ways to manage your inventory is to organize products accurately by dividing them into categories. It may help you to save time and effort when you stock out or sell products.
For example, if you have T-shirts, skirts, and pants, they may all be divided into several categories as long-sleeve T-shirts and short T-shirts. It would be much easier to organize them in a specified way.
2) Use an Inventory Management Program
Beginners of online store businesses might believe that using Excel or notes to manage inventory is the simplest and most affordable way. However, considering long-term inventory management, using Excel or notes becomes more challenging as the number of products and sales grows.
Especially when choosing an inventory management program, selecting a cloud or web-based program is highly recommended! The inventory management systems greatly help to simplify the process of accurately tracking inventory, reducing errors, and saving time overall.
3) Inventory Count
An effective way to match data with current inventory is to do inventory due diligence. This is a method of double-checking your inventory to ensure that what you record reflects the happenings in your warehouse and business.
Inventory due diligence is crucial when running an online business to avoid inconsistencies between your current inventory and data. If inventory discrepancies occur, there is a risk of miscalculation, lost items, and other issues, all of which can have a negative impact on customer and partner relationships.
It is a good idea to maintain track of your inventory to be prepared for this!
For example, if an inventory count is performed more frequently than once a year, it may significantly reduce errors and mistakes while also saving time.
4) Data Analysis for Reordering
Repurchase is one of the most important and complicated operations in every retail business. It is because sellers wish to satisfy their customers by providing items that meet their needs while also reaching the company's financial goals!
However, two major issues frequently arise in these situations.
- How much should I order in terms of quantity?
- When do I need to order additional stock?
You can easily analyze the entire inventory and solve the above problems by using the inventory management application.
For more accurate reordering, please consider the following criteria!
Check your safety stock. By designating safety stock, you may quickly identify products that are less than specified and reorder them to avoid unexpected out-of-stock situations. First, safety stock is additional inventory that may be prepared in case the inventory is depleted due to unexpected circumstances in business operations, such as a sudden increase in demand for goods. Unexpectedly high demand may be beneficial to business operations, however, it can also lead to consumer dissatisfaction.
How do we calculate safety stock?
Safety stock = (Maximum daily usage x Maximum lead time in days) – (Average daily usage x Average lead time in days).
*Lead time: amount of time it takes from placing an order to receiving product from supplier
You may also check it automatically with a formula.
*Example: "Reorder the product" = Immediately reorder an item that is less than the safety stock quantity.
5) Scan Barcodes to Automate Inventory Management
Online store owners receive tens or hundreds of orders per day. Receiving a lot of orders in a limited time may result in having errors or mistakes. So how can we avoid these mistakes?
Try using a barcode system to place your order! Barcodes can help you organize things faster and more accurately.
For more information, please visit BoxHero's homepage.
Easily Manage Online Store's Inventory with BoxHero.
BoxHero supports features that are ideal for managing inventory in an online business, such as:
- Organize products by categorizing them according to your needs, such as brand, color, and size.
- Check your inventory status of reordering with Analysis feature.
- Identify item's low stock and view current stock status to maintain appropriate inventory management.
- Generate, scan, and print barcodes can all be processed quickly.
- Easy to create purchase orders as well as invoice statements and analyze sales.
- BoxHero is a cloud-based inventory management system that allows to create and share transaction with your team anywhere, anytime.
BoxHero is an easy inventory management solution for everyone.
BoxHero's various smart features suit all industries and businesses.
Start inventorying right now with BoxHero!