Strategic inventory management: The key to success in ecommerce
Over the past decade, online shopping has become increasingly popular. More and more customers are enjoying the convenience of the Internet to purchase their needs and have their orders delivered right to their doorstep. Ecommerce is indeed changing the landscape of the retail industry, which is why every retail business understands the importance of establishing its online presence just to stay ahead of the game. In addition to that, companies also need to employ strategic inventory management processes to ensure a totally satisfying online shopping experience for their customers.
Most ecommerce businesses start out small. They usually evolve from a hobby or a side gig. If you are currently selling some products over the internet or are seriously considering setting up your own ecommerce website very soon, you’d most likely be at any of these three stages of building your business.
Stage 1: You’re just testing the waters. You have some items to sell for a profit, so you post them on your social media accounts. You could also be running your own blog for this purpose. Transactions are usually between family and friends, as well as friends of friends and friends of your family members.
Stage 2: You’re getting more sales and orders than you expected. There seems to be great potential in expanding your online business, so you’re seriously considering putting up a fully operational online store. Rather than simply advertising your stuff on social media, you start using a more dedicated ecommerce platform to widen your reach.
Stage 3: Your ecommerce business is running full speed. You are selling on multiple channels and have a comprehensive range of products in your inventory. You are sourcing stocks from different warehouses and retail locations, so you rely on the latest ecommerce inventory management system to streamline and consolidate your day-to-day operations.
Strategic inventory management for your growing ecommerce business
So you’re ready to grow your business by expanding to multiple sales channels. In most instances, however, businesses experience a slump when they arrive at this crossroad. Selling over multiple channels is easier said than done and taking that big leap from Stage 2 to Stage 3 can get quite overwhelming.
The opportunities presenting themselves at this point can be tempting, but you’re afraid that all the work involved will be a lot more than you can handle. You have very promising options to choose from, starting with the shift from your current ecommerce platform to running an independent online shop. You’re also thinking of setting up a brick-and-mortar outlet or placing your products up for consignment at retail partner locations.
Then there are these online public marketplaces and shopping comparison sites that can help point customers to your main retail site. Truth be told, the whole world can become your retail playground. But as you explore your options, there is this one big question hounding you – how will you be able to manage your inventory in such an elaborate set-up?
When it comes to effectively managing ecommerce in business, everything boils down to strategic inventory management. Selling over multiple channels means you need to integrate workflows to eliminate the redundant manual tasks that used to eat up a lot of your time and productivity. Probably you were using different spreadsheets to document incoming stocks, sales, and current inventory for each of your sales channels.
If you wanted to find out which products are selling fast or what items you need to reorder, you’d have to browse through each spreadsheet manually to get your answers. Crucial decisions on how to move your business forward had to wait because you were so caught up with tasks that could just be automated and streamlined if you were using highly reliable ecommerce inventory software.
Strategic inventory management and supply chain operations
Your day-to-day activities and business processes are going to be more complex once you add new channels to your ecommerce business. The first thing that comes to mind is how you are going to manage your supply chain now that you’ll be selling your products across multiple channels. How do you bring in just the right amount of new stock and maintain a healthy inventory as you continue to fulfill orders coming from different retail channels?
This is where strategic inventory management comes in. It’s all about consolidating your systems and processes to improve overall operational efficiency. The aim here is to create a seamless experience for you, your customers, and all the other people you work with – your suppliers, vendors, distributors, resellers, and warehouse personnel. With a reliable ecommerce inventory management system in place, stock levels for each product in your inventory are updated in real time the moment a sale is made in any of your sales channels.
That way, you can maintain accurate multi-channel inventory visibility at all times. In addition to that, key players in your supply chain are notified when they need to take any action. This used to take hours or even days to accomplish, but can now be carried out in a matter of minutes, so think about the real value that ecommerce inventory software can provide you.
How ecommerce inventory software can help grow your business
Now that you understand the importance of strategic inventory management in your retail business, let’s take a look at how inventory management software helps integrate all your business processes for increased efficiency, productivity, and profit.
Precision in order management
Inventory management software takes all the guesswork out of stock replenishment. You no longer have to worry about excess inventory or out-of-stock situations, as the system will identify the most likely reorder point for each product that you sell. That translates to reduced operating costs and more profit for your business because inventory doesn’t sit in your warehouse longer than it should.
More reliable product identification and tracking
Inventory management software enables the use of barcodes to store relevant information on every item that comprises your inventory. With just a quick optical scan, you get access to reliable data for a broad range of applications including pricing, inventory level, product location, and availability. Barcodes also make it easy for you to track merchandise when moving them across different warehouses and distribution channels.
Full automation of business processes
The automation of procedures that once were done manually not only saves your business a lot of time and money; it also drastically reduces the propensity for human error. Inventory management software is designed to simplify and improve workflow so you can stay on top of your business activities in real time. You can check stock levels, predict reorder points, and generate sales reports with just a few clicks. It also consolidates data so you can make projections and informed decisions that can steer your business towards success.
The best inventory management software also comes with added features that ecommerce retailers will find helpful:
Compatibility with eCommerce platforms: Most online sellers built their first online store using ecommerce platforms like Shopify and Magento. The move to expand your retail activities across additional sales channels doesn’t have to be difficult. You won’t have to depart from your existing setup in case you have grown comfortable with it. Comprehensive ecommerce inventory software should be able to integrate business processes with these platforms so that you can manage inventory, orders, and product information from a single, central location.
Integrated warehousing: Selling across multiple channels means that your stock will be scattered across different locations. The bulk will be at your central warehouse while others are likely to be distributed among physical stores, resellers, and consignees. Inventory management software enables you to keep track of how much inventory you have on hand and where your products are at any given time. The information is available to everyone who has access to your system, so there’s a lot less work to do and less room for error, too. If suppliers encounter delays with new deliveries, it will be effortless for you to decide where to transfer existing stock from just in case one channel is running low on inventory.
Real-time inventory updates: Nothing frustrates customers as much as finding out that the item they want to purchase is not currently available. Inventory management software helps prevent these out-of-stock situations by syncing inventory availability across all your retail channels. Whether you’re selling your products online, in-store, or via public marketplaces, you always have an accurate picture of stock levels across all your inventory locations. You’ll also be able to observe customer shopping patterns and find out which sales channels are performing better than the rest.
Seamless tracking capabilities: Without a strategic inventory management system in place, it will be challenging to know where all your products are located. Are they close to selling out or are they sitting idly in a stockroom or warehouse? Is a particular brick-and mortar outlet running low on certain items or do you have excess merchandise that needs to go on sale so you can create more warehouse space for upcoming deliveries? You won’t have to ask these questions when you have integrated all your systems using a reliable ecommerce inventory software. Tracking your inventory will essentially be error-free whether you’re selling your products over single or multiple retail channels.
Should you take the leap?
Strategic inventory management is the only way to go if you want to grow your ecommerce business. If you’re still undecided about investing in ecommerce inventory software, do the following. Sit down and calculate how much you are currently spending regarding time, money, and effort to manage your inventory. We’re pretty sure you’ll have a very revealing answer halfway through the process.
For further steps and advice, why not chat with our guru?