Ecommerce Stock Management – Guiding principles for success
As an emerging ecommerce stock management company, you are tempted to do whatever it takes to establish and maintain long-term relationships, but how far are you willing to go?
Tracking, measuring and forecasting inventory should be the number one priority for your business to sell and fulfill orders, shouldn’t it? It should, but many companies (estimated to be 50%) fail to manage their inventory properly.
Ecommerce stock management – building a solid foundation
To create a solid brand image and reputation for high-quality and on-time delivery, it is important that your inventory management practices are sound and your available inventory is visible across the entire organization.
Doing this will ensure that you have the proper level of inventory to satisfy demand. It will also ensure that your customers receive consistent product fulfillment. The bonus is that your customers will enjoy a positive and productive relationship with your brand.
Ecommerce stock management – what are the guiding principles?
After evaluating many options and recommendations that are available to manage ecommerce inventory, three have risen to the surface and should be considered. So, let’s take a look at what proper inventory management looks like.
1. Your decisions are only as good as the data they are based on
The importance of this first principle cannot be overstated. You can’t make decisions based on outdated ecommerce inventory data. As the number of product SKUs grow, keeping track of what products are available in each inventory location becomes a significant challenge. If you add to this the logistical ecommerce stock management of your inventory such as; time to pack and ship, delivery routes, and fulfillment operations to get the product delivered to customers, you quickly see how challenging this can be.
To address this logistical nightmare, there are a few basic things that you can do such as; making sure ecommerce inventory data is up to date and accessible so that communications and decisions are based on sound data. Without up-to-date ecommerce stock management inventory data, your business growth and partnership opportunities could bottom out and eventually drive you out of business.
2. You need to know how quickly your products are flying off the shelf or not
How quickly products are moving is also called inventory turnover which is an indicator of the health of your brand. It is determined by how quickly you can move each item in stock to a completed sale status.
With an ecommerce stock management system, you have a clear picture of turnover across all your product lines and based on that you can make much better ecommerce inventory decisions. For example, if you see that a particular item is sitting in inventory a lot longer than expected, you can take a look at the cost of the item and determine whether the margins of that product warrant the overhead cost of keeping it in inventory.
Maybe it is time to discontinue carrying that particular piece but without an ecommerce inventory management system, you wouldn’t know this. Keeping an eye on inventory turnover will enable you to see beyond today into what could be tomorrow and make informed decisions about what to keep and what to leave behind.
This type of data-driven decision-making will ensure that the high demand products are always in stock and available for purchase. This will make sure that you will earn more business and happy, loyal customers going forward.
3. You should compare your company’s inventory Key Performance Indicators (KPIs) to industry standards
No matter what business you are in, it is imperative that you have a solid understanding of your own inventory KPIs and how they compare to the industry. When you are a growing company, it is easy to put your head down and focus on your business without much thought for other companies in your industry. This is not unusual but forgetting about it or sweeping it under the rug could impact your business.
Take the time to seek industry benchmarks to ensure that your ecommerce stock management inventory performance does not deviate too much from the standard. If it is, then making a few corrections may be all that is required to stay on track. If you feel like you cannot manage this yourself, then you should consider partnering with an ecommerce inventory fulfillment partner that can provide tools as well as logistics and expertise that will ensure that your brand remains in good standing.
There is no question that ecommerce stock management of inventory is an area that cannot be ignored. The principles presented here are important and should form the foundation of any growing ecommerce business that is building a solid brand. Don’t take a chance by underestimating the importance of these guiding principles. Your success depends on it.
To find software that will help you manage your growing ecommerce business, talk to our guru for guidance.