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Fundamentals of Inventory Management for E-commerce Store

Posted In Uncategorized - By Techtiplib on Thursday, January 17th, 2019 With No Comments »

2019 is here and I’m sure your social media has been bombarded with #newyearnewme posts. But why not?

This new year, you can apply the same motto for your ecommerce business and aim to reach new heights!

I understand that working with an ecommerce business is no cakewalk. You have to worry about maintaining just the right amount of inventory not just on one channel but multiple sales channels. On top of that, there is the added tension of fulfilling all orders correctly and managing returns.

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But no need to fret. I’ve compiled some fundamental basics that can prove extremely useful to bring your ecommerce inventory management right back on track.

Important Factors To Consider in Ecommerce Inventory Management

E-commerce sellers are catering to customers who seek a consistent shopping experience on all platforms. But that’s easier said than done right?

To provide a multi-channel shopping experience, sellers, you have to ensure you are maintaining tight control on the inventory on all channels. Customers sway easily and if you can’t sell them what they want, when they want it, they’ll conveniently move on to your competitor.

So here are a few practices you should follow to make your inventory management process smooth and accurate.

Demand Forecasting and Stock Planning

The first step to achieve accuracy in demand forecasting and planning is to make sure there is consistency in stock information across all physical locations and sales channels too.

Imagine a customer that browses through your site, selects a product, goes all the way till checkout, only to discover that the product is out of stock.

You don’t want such a situation to arise. You need to have access to precise data about stock in different warehouses so that you can fulfill orders properly. If you’re an ecommerce seller operating on multiple platforms, keep track of stocks across all of them.

Once you have consolidated all this information, you will be better equipped to make decisions according to changes in customer demand and planning stock adjustments accordingly.

Demand forecasting is a central piece in the inventory management puzzle. The main motive is to make predictions and estimations for the future demand of a product and also to find potential markets for it. A demand forecast specifies the needed inventory that will help to combat fluctuations in demand. Demand forecasting can be determined by factors such as competition, historical data about past sales, changing customer preferences etc. after getting a clear idea on where demand trends are headed, you can calculate safety stock and reorder points, place stocks strategically in different warehouses and prepare for stockouts.

Manage Inventory Levels across Channels

Placing inventory on multiple channels can often lead to overselling products. You need to manage inventory levels accurately on different channels like your brick and mortar store and online store, marketplaces, and storefronts.

For this, you need a system that gives you real-time information flow so that you always have the right amount of inventory at the right place at the right time.

Use an Inventory Management System

Taking a cue from the above point, it not advisable to manage inventory for your ecommerce business manually on spreadsheets or ledgers. That increases the risk of errors and miscalculations about inventory carrying costs, stock levels, not to mention it is generally a cumbersome method.

A system that manages inventory across multiple channels provides real-time updates about stock movement and also tracks each order while it is placed, is a dedicated inventory system.

By utilizing an inventory management system, you work on a centralized platform that showcases a holistic view of your inventory on all sales channels.

You can integrate your warehouses and oversee the movement from each separate location.

An inventory management software integrates with ecommerce platforms assuring that when an order is placed on one of the platforms, all the items in their shopping cart are synced with the different sales channels.

Handling Returns

Returns are an inevitable consequence of dabbling in ecommerce. Much to your irritation, customers will purchase products and return them as well.

You need to have a solid system in place that handles returns and refunds of orders because it is easy to lose track of stock count in the confusion. An inventory management system can make this process really easy for you.

Finally…

Ecommerce industry is experiencing skyrocketing growth. To ensure success you need to efficiently utilize your resources to maximize profits. Ecommerce sellers need to implement smart strategies for inventory management to improve efficiency and reduce errors.

Author Bio:

Kriti is the Content Writer at Orderhive. She is an avid reader. Daydreamer. The perfect Saturday evening is a cup of hot coffee with a classic book. She loves animals. Prefers mountains over beaches. She is always craving for stories.

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