Mastering ecommerce inventory management software
Inventory management is crucial for ecommerce businesses, but how do you operate it effectively? You need to understand the key factors behind this process before even attempting to master it, so let’s give you the basics right here.
The basics in mastering ecommerce inventory management software
First off the bat is keeping your resources at optimum quantity. The right amount at all times. That way you’ll always have seamless results. It seems difficult… in fact, it would help if you were psychic. But that’s what inventory management software is all about: being the next best thing. Smoothing the path to near perfection to avoid any bumps on your business journey. When things are seamless, you’re not wasting time.
As you know, time is money and both go down the drain just as easily. In today’s hyper-competitive landscape time lag can cost you more than dollar signs. It can also lose you customers and your reputation.
Inventory as an element of business is growing at quite a rate. Would it surprise you to learn that it makes up 7% of U.S. GDP? That’s $1.1 trillion in case the previous figure didn’t floor you. Retailers invest $1.43 in inventory for every $1 of their sales. Now consider this extraordinary fact – nearly 46% of SMBs (Small Medium Businesses) use manual tracking for this task. Maybe you’re one of those businesses. Maybe you don’t track your inventory at all. If that’s the case then please keep reading, we are going to save you a lot of time and money.
If you aren’t meticulous about ecommerce inventory management, you lose out on cash and all-important growth opportunities. Software is your best friend for maximizing this and as ever the results speak for themselves. Those operations with robust systems in place have 95.4% of their customer orders delivered on time, alongside 94.6% of supplier orders received promptly. Also, the frequency of their out of stock inventory is reduced dramatically, making you look even more efficient to the visiting public.
The benefits of using trusted inventory management techniques for ecommerce business include:
– Balanced Supply and Demand
Robust and seamless ecommerce inventory management software ensures your resources and products are swiftly replenished. An additional benefit is that seasonal goods are cleared, so you’re not frittering away space and resources storing them unnecessarily.
– Geographical Benefits of Ecommerce Inventory Management Software
If you want to be truly cost-effective, this is essential. Sound inventory management can anticipate labor, energy and transportation costs. It does this by analyzing feasible locations and identifying areas where activities such as storage can take place, giving you the best value destination for each element of your business.
– Backup Stock
Let’s say your resources are at optimum capacity. However what if there’s a sudden increase in demand, or you experience unexpected delays? You don’t want to get caught out. This is where your backup/buffer stock comes into play. Good inventory management ensures it’s always available, leading to higher sales and happier customers.
Here’s how you can manage inventory using ecommerce inventory management software
When you’re the captain of an ecommerce business, you have to run the tightest of ships. Every day you’re navigating the choppiest of logistical waters. Multiple factors have to be managed simultaneously, from payment channels to stock levels. If the vessel is steered correctly your business will expand, making matters even more complex. You require the stability of concrete ecommerce inventory management software, fully functional and updated around the clock. This must be buoyed by solid inventory management tools and practices.
We are now going to equip you with the knowledge to set sail with confidence, thanks to our comprehensive list of guidelines which put efficiency squarely on the horizon:
Real-time inventory information with ecommerce inventory management software
The only guaranteed way to keep tabs on your inventory is to use real-time information. You’ll never over-sell or over-order again if you know what’s in your records second by second, sale by sale. Crucially this delivers pinpoint accuracy with regards your capacity.
A continuously updated inventory count gives procurement officials the freedom to replenish sold items promptly. This, in turn, enables you to deliver on your promises to customers and streamlines your business so transactions are smooth and expertly-controlled.
Real-time info can be accessed from all office locations – great news for both customers and your own needs. Not only does it mean they are in the loop about current capacity (via the ‘In Stock’ section of your website), it also means you don’t over-order, leading to excessive amounts of inventory taking up space and resources.
Drop shipping is a vital process if you don’t have the funds to maintain a big storage unit. It involves building relationships directly with suppliers who keep their own inventory. An item can be ordered from you and despatched by them to the customer without the added cost of housing products yourself. As far as the client is concerned, they’re buying directly from you.
Drop shipping is a useful tool in ecommerce inventory management software that gives maximum advantage to growing businesses. An ‘endless aisle’ of stock is created, with trusted suppliers shouldering any additional orders that take you outside your inventory levels.
As you can imagine, a flawless inventory management system is the backbone of an effective drop shipping arrangement. You and your supplier need to promptly share information with regards to orders, order statuses, real-time inventory counts, and invoices. Accuracy, timely delivery, and financial reconciliation are then amply catered for.
Centralized Inventory System
Some stores function through a single ecommerce platform, which is fine if you only sell in one geographic location. For those who ply their wares across multiple locations – both on and offline – a specially-designed, centralized inventory system is a must-have. From there your inventory is effortlessly maintained in real-time using a single interface. The system can utilize ERP (Enterprise Resource Planning) software or POS (Point Of Sale), which is with your chosen platform.
This important part of the ecommerce inventory management software puzzle puts you firmly in the driving seat, making you a proactive player in the quest for efficiency. Good forecasting involves foreseeing demand for certain products as well as the locations and quantities in which they’ll be needed. Any ecommerce store worth their operational salt should conduct thorough market research and study demand models to determine the inventory levels required.
Have you ever considered the speed with which your item leaves the shelves? Inventory velocity or ‘turn’ gives you vital stats as to the health of your brand. Accurately identifying inventory velocity is a key stage of the process. It factors in supply and demand, enabling robust forecasting. It also helps your decision-making about procurement, storage, and shipping to proceed more intelligently. This results in tremendous amounts of money saved on hundreds and thousands of products.
Just because you’ve arrived at the perfect inventory management solutions, does that mean the work stops there? Of course it doesn’t. As with any element of your business, the effectiveness of the process must be regularly analyzed. This is done by comparing what you’re doing against established industry benchmarks. Competition is cut-throat in the ecommerce industry and you don’t want to put your neck on the line.
Lags in performance can be spotted and rectified. You can identify the root causes of inventory management issues and give your productivity a kick where it counts by sprucing up your day to day activities and stakeholder performance.
Supply chain management
When conducting supply chain analysis, it’s easy to stick to one section and ignore the wider picture. We advise analyzing the entire supply chain. By keeping track of raw materials, product demand and customer buying patterns you ensure a meticulously-managed inventory and a well-prepared ecommerce store that can deal with any pesky fluctuations.
Inventory Management System
Don’t forget that inventory management systems are computer-based and save businesses money by tracking every aspect to the letter. Your orders, sales, and deliveries are truly mastered and will never give you a headache again in the way scraps of paper going astray can!
Why your store needs Ecommerce inventory management software
This section covers the factors behind why ecommerce stores are thriving thanks to third-party inventory management systems. These include:
Matrix products are tricky as they include variety within a single item. A typical example would be a shirt which is sold in multiple colors as well as sizes. Ecommerce platforms struggle to manage these products efficiently due to the resulting increase in SKU (Stock Keeping Unit) manifolds. The only way to ensure your inventory levels are maintained to an optimum standard is by using an inventory management system.
With their multiple quantities and reduced prices, bundles offer variety and value to the customer. However they inevitably complicate inventory management. An inventory management system gives you the power you need to gain an overview of this logistical minefield.
Having stock which is distributed across lots of different channels means you need increasing levels of skill when it comes to inventory management. As mentioned earlier in the article, a centralized system paves a path to success in this regard.
An inventory management system provides you with a whole canvas on which to use the brushes of your business palette. So with this ability to obtain accurate, up to the minute information about stock, why not employ a time-intensive package such as Just In Time (JIT)? It enables ecommerce stores to only bring in items when they are required, often saving valuable resources. JITs make the perfect partner to an inventory management system’s precise forecasting and analytical qualities.
How to choose an inventory management system
Selecting the right system for you is a tedious and seemingly complex process. What’s worth remembering is that you should pick what suits your particular needs. Industry leaders may swear by a certain solution but that doesn’t necessarily mean it’s going to be the correct one when it comes to your own ecommerce business. Here are some brief tips to find the perfect fit for your store:
Customization is key
You’re an individual company, so your inventory management system should reflect that. Get something with inbuilt features as standard but pick a system that serves all your business needs. This is the key to driving business growth.
Accurate information about products must be provided to customers by ecommerce platforms. If you run a large store, this can be challenging to say the least. Not knowing your exact level of inventory is potentially fatal, so pick an inventory management system which synchronizes across multiple channels, geographical locations and offline. Through this, you avoid delayed deliveries, loss of reputation and inefficiency in your operations.
Real-Time inventory count
Having an automatically-identified, real-time inventory count that’s rapidly disseminated to all offices and displayed via your online presence is a major weapon in your day to day arsenal.
Warehouse management, with its disciplined receipt of inventory and its storage/record-keeping, is a difficult task to undertake in relation to managing inventory. You need high levels of accuracy but that can be daunting in the face of operating across different locations.
An inventory management system creates a single platform which houses those multiple warehouse requirements under one roof. Inventory levels are accessed and overseen with ease.
Barcode scanners form part of an inbuilt inventory receipt feature which stores details of product quantity for convenient retrieval whenever you want. Did you know barcodes have reduced administrative errors by over 40% in this respect? You’ll start to find that constant beeping noise the scanners make strangely reassuring.
Integration with other platforms in ecommerce inventory management software
Your chosen inventory management system should have integrations that link to your ecommerce platform. It is vital if you’re planning to host your website via other platforms, such as Shopify, and enables real-time synchronization and management of information across all channels.
In summary, inventory management is an essential task that can easily become a chore. You can make this process much easier by using a management system that keeps an eye on all aspects of your inventory all the time. Your ecommerce business will be totally efficient, easier and more pleasant to organize and above all better-received by your valued customers.
To choose the best software that integrates with your ecommerce platform and makes inventory management a breeze, chat to our guru for advice.