The E-commerce market has continuously grown not only in the size but also in type as well. Along with Amazon as the largest overall E-commerce platform, the appearance of many different market niches ( i.e. Etsy's handmade goods portal, eBay's auction house, and others like Shopify or BigCommerce) have not only increased in buyers but also bolstered the amount of independent online sellers.
Especially with the effects from the pandemic, converting from brick and mortar towards online commerce has been an important decision each business has faced. Regardless of online or in-store, running a business is not easy. If you are selling products, the process is more complicated with the extra step of managing inventory as well.
Today, let us learn how to manage inventory for E-commerce businesses and some of the most efficient ways to control your stocks before getting shipped out for order placement.
What is E-commerce inventory management?
Like managing stocks of a physical store, E-commerce inventory management also requires reordering, controlling quality, counting inventory, with the addition of shipping products to customers. For traditional brick and mortar businesses, shipping becomes and option after receiving and shelving products in the store, whereas online stores' inventory turnover can only occur through delivering orders to each customer.
It is important to always keep shipments in mind for online businesses because this directly correlates to customer satisfaction. As we commonly research when shopping online, the satisfaction of customer reviews can greatly effect the decisions of E-commerce users.
3 Reasons why E-commerce Inventory Management is Important
- Customer Satisfaction - Since online stores lack customer relationships compared to in-store, it is important to maintain customer's trust. Thus, one important factor in building that trust is order management, or in other words, making sure customers receive their package as soon as possible. Because online shopping requires customers to pay first, it is important to minimize the buyers' wait time. Considering how shipping also takes time, it is important to manage orders and regulate optimal inventory quantities.
- Save Time, Save Money - If you have to constantly rummage through your inventory every time a new order is placed, it is a sign of an emergency. From managing orders to checking the shipment, an E-commerce business needs regular oversight on many different operational aspects. Using inventory management methods will save time and money, which can be partitioned for other business activities such as strategizing marketing tactics.
- Streamlining Your Business - Although many businesses neglect inventory management, it is important to start inventorying to streamline and increase the efficiency of your business. Accurately analyzing and breaking down each function helps recognize the necessities of the business, thereby improving performance. By organizing and knowing when and which each product must be ordered, you can optimize your business in accordance to customer demands while removing unnecessary factors.
Recommended E-commerce Inventory Management Strategies
- Adopt Barcodes - Commonly, barcodes are used in uniquely identifying, managing, and selling manufactured items. However, barcodes can be applied to a variety of situations to help with business organization. If your products/storage units/office equipment/etc. do not have barcodes, creating and attaching a label allows a business to locate, allocate, and relocate assets quickly. Creating a database with the barcode data pulls all available characteristics together, making it easy for customers and owners to locate items. In addition, utilizing barcodes with a camera or barcode scanner can make your work faster and easier.
- Analyze your Inventory - Knowing inventory quantity and making shipments is one thing, but analyzing and predicting your inventory needs is the next step towards better inventory management. Factors such as and not limited to inventory turnover ratio, Average Days to Sell Inventory (DSI), Holding Costs, Stock Outs, and Gross Margin Return on Investments (GMROI) allows businesses to forecast different demands on their assets and find the most profitable routes. Identifying your inventory data helps with addressing reorder time, optimal stock levels, and planning for future operations.
- Use Inventory Management Programs - With an inventory management program, accurately recording and analyzing all inventory data can prove beneficial in the long run. With BoxHero's mobile app, you can scan barcodes right from your smartphone to record stock in and out transactions. From the BoxHero web platform, you can use all the functions including viewing all inventory analytic updates in real-time.
Have a hard time managing your inventory? Try BoxHero now.
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