Tips for managing your online inventory
E-commerce inventory management plays a critical role in determining the profitability of businesses. It is all for small and medium business enterprises (SMBs) due to the fiercely competitive environment. In which they operate and the necessity for them to realize value for their investments in terms of returns (ROI). For a reason, finance for their businesses does not come that easily and cheaply. In this article, we focus on providing tips that you can apply in your E-commerce inventory management to improve its effectiveness and profitability in your business.
Tips:
Applying flexibility in managing your inventory in the E-commerce inventory management right from the stage it is received. And, until it is processed and or sold, it is not an option but a necessity. Because it is the life cycle determining the receipt, storage, and sales are the factors that control costs and improve the margins.
Spending disproportionate time on inventory in your E-commerce inventory management would eventually result in spending valuable staff-hours that would breed inefficiency. It is not enough if you invest in generic inventory management software in your E-commerce inventory management, as no one-size-fits-all. You need to determine your needs. And invest in software that can be as perfect as fit as it can be for your business. Stated otherwise, choosing and using a technology that aligns well with your company is mandatory. To yield the fruits for which you have been running your business.
You have a rich source in the form of the inventory data that gets generated in your E-commerce inventory management, which provides you clues as to how you can optimally manage your future inventory. Analysis of the data comprising of past purchases and sales give a scientifically formulated intuition of what, when to order. You can use the ‘min/max’ recording method to take a quick tour to understand what needs to order. Herein, for each of the products, the ‘min’ value represents the level of stock that triggers a recorder.
And the ‘max’ serves the purpose of providing you an indicator of the stock level following the placing of such reordering. If you are at an early stage in your business, you can start with a spreadsheet. And as you grow and reach scale, you can use cloud-based inventory software. You are keeping in mind what has been stated earlier on the right technology you have to invest in.
In the operation of your E-commerce online store, audits are especially important. As there are chances of getting things mixed due to their handling digitally. If your inventory is not what you have calculated, it results in the losses and strained relationship with the customers. Hence, being vigilant with regular auditing can save botheration and lead to a better realization of your investments.
Once you have put the inventory on a firm footing in the E-commerce inventory management. You can go ahead by offering ‘kits’ or ‘bundles’ of your products. Kitting/bundling is an assembling process in which separate, but related items grouped, packaged, and sold as one unit to the end customer. An example of this is offering, say during a weekend’, automotive wash bundle comprising of wash, sponge, and a bucket. The advantage you derive by doing so is that it has the prospects to increase your listing on the selling channels without having to increase its count in the warehouse. Yet another positive spin-off is that there is a likelihood of fewer bundles being available in the market place that would make you stand out.
Conclusion: Sell more on the marketplace
The key take away of providing a few tips that work in E-commerce inventory management is that when you apply them in business, they offer the opportunity to increase sales in markets places and web stores by enhancing the visibility of your products. In short, having a firm grip on your inventories and sales lead to a lesser need for working capital and improve your warehousing operations. Which, in turn, justifies the fixed cost investments wherein the marginal benefit is higher than the minimal cost. It results in profitability on an incremental basis.
Keywords: E-commerce inventory management, INVENTORY, BUSINESS, inventory management, APPLY, SALE, SALE, INVEST, IMPROVE, STOCK
Originally published at https://upkaizen.com on February 7, 2020.
