{"id":224619,"date":"2020-04-10T08:49:43","date_gmt":"2020-04-10T03:19:43","guid":{"rendered":"https:\/\/www.qcsglobal.com\/?p=224619"},"modified":"2020-04-18T17:10:18","modified_gmt":"2020-04-18T11:40:18","slug":"how-e-commerce-inventory-management-can-help-you-save-money","status":"publish","type":"post","link":"https:\/\/qcsglobal.com\/blogs\/how-e-commerce-inventory-management-can-help-you-save-money\/","title":{"rendered":"How E-Commerce Inventory Management Can Help You Save Money"},"content":{"rendered":"\n
\n

E-commerce platforms are no longer secondary to that of brick-and-mortar stores.<\/p>\n

<\/p>\n

In fact, having an e-commerce<\/a> platform is crucial to ensure business success today. The numbers don\u2019t lie. Global retail e-commerce sales totaled over $3.5 billion<\/a> in 2019.<\/p>\n

The value of the market is rising year on year. Running an online store can be a lucrative exercise if you get the vital processes correct. One such process is your inventory <\/a>management<\/a>.<\/p>\n

At heart, e-commerce is simple. You showcase a range of products online, customers find and buy what they want, and then you deliver. What\u2019s critical, then, is that you have the items you advertise and can get them where they need to go. That\u2019s why getting your inventory management right is essential.<\/p>\n

Read on, and you\u2019ll learn all you need to know about the crucial area of your e-commerce business. We\u2019ll discuss precisely what inventory management is and why it\u2019s so vital. Then, we\u2019re going to explain what you can do to streamline your inventory management and how it will save you money.<\/p>\n

What is e-commerce inventory management?<\/h2>\n

Inventory management is a business process that encompasses many elements related to the supply chain. That comprises ordering stock or components from suppliers. It also includes warehousing products and dispatching items for delivery. All the while, accurate records of where units are and how many you have, get created and updated.<\/p>\n

\"e-commerce<\/div>\n

Source<\/a><\/p>\n

It\u2019s in the retail sector that inventory management is most vital. Retailers get driven by supply and demand. As businesses, they only succeed if they supply products that their customers demand. Having enough of the right items on hand, therefore, is fundamental to their survival.<\/p>\n

For online retailers, superior inventory and warehouse management systems<\/a> can make a profound difference. Get it right, and your firm can thrive. Get it wrong, and you may fold. Having a handle on stock and the supply chain helps companies to meet vital challenges. The following are some of the reasons why inventory management is so critical.<\/p>\n

Avoiding overstocking<\/h3>\n

Overstocking can be damaging for any ecommerce firm. For smaller businesses, it can be fatal. If you have too much stock on hand, you\u2019re wasting your valuable warehousing space<\/a>. That\u2019s room that could be utilized for more products that customers are buying. In the worst-case scenario, overstocking can also lead to having dead stock. That\u2019s inventory that you\u2019re never going to sell and may have to pay to dispose of.<\/p>\n

More effective order fulfilment<\/h3>\n

Having too little stock can be as bad as having too much. You don\u2019t want to run out of items that customers want to buy. That\u2019s custom you\u2019re giving up, simply because you got your stock levels wrong. What\u2019s even worse is if you take orders that you can\u2019t then fulfill. That\u2019s called overselling and is something customers don\u2019t forgive. 69% of consumers<\/a> are less likely to use an online store again if an order gets fulfilled as little as two days late. If an order gets canceled, the percentage is far higher.<\/p>\n

Better visibility for larger organizations<\/h3>\n

It\u2019s not only smaller businesses that must focus on inventory management. It can be even more critical for larger organizations. Take, for instance, an online retailer with multiple warehouse and distribution channels. Keeping track of stock and orders gets exceptionally complicated. A streamlined, efficient inventory management system is a necessity.<\/p>\n

Improved scalability<\/h3>\n

You might think you can track and handle your inventory by hand (or with pen and paper). When your business is small, you might be right. As you grow \u2013 and that\u2019s presumably your aim \u2013 your manual management won\u2019t scale. It\u2019s only a well-defined and streamlined system that can grow with your business.<\/p>\n

How to streamline inventory management processes for your online store<\/h2>\n

Streamlining inventory management is always worthwhile. That’s whether you run a new or established online store. Small improvements in your supply chain can make a big difference. By finding the right system for your firm, you can improve many processes. From logistics to customer service, you\u2019ll see better efficiency across the board.<\/p>\n

The following are six straightforward steps to take to streamline your inventory management. We\u2019ll discuss each in brief, and explain how it can make a difference to your bottom line.<\/p>\n

1. Understand your current system and customer demand<\/h3>\n

The first step in improving any system is ensuring you know precisely where you stand. That means taking stock \u2013 no pun intended \u2013 of how you currently track and manage inventory.<\/p>\n

Examine your system and find its particular weaknesses. If you use manual processes, for instance, you\u2019re almost certainly compromising speed and accuracy. What you also need to understand inside-out is customer demand for your products. Only by knowing how and when demand fluctuates, can you ensure you always have the right stock levels.<\/p>\n

If you\u2019ve been in business for a while, you can delve into your sales records to get this info. The best e-commerce platforms let you find this information with ease. In some cases, though, you may have to dig out paper records or search your servers. Go back as far as you can and compile data on how and when demand rises or falls. You need to look out for trends over time and the impact of different seasons or events.<\/p>\n

New e-commerce firms<\/a> won\u2019t have the volume of old sales data to fall back on. Google Trends, though, can prove useful in giving you something of a steer. All you need to do is plug in the name or description of the products you\u2019re going to sell. You\u2019ll then see an indication of how search demand for those items changes over time.<\/p>\n

For instance, the below graph shows interest in the term \u2018Raincoats\u2019 over the past five years:<\/p>\n

\"interest<\/div>\n

There\u2019s lots of utility to examining customer demand. It provides insights into your most popular products, and when they\u2019re most wanted. That will help you make fundamental decisions about inventory management. Those are choices like where to set minimum stock levels and whether to change them at certain times of the year.<\/p>\n

2. Implement data analytics and forecasting<\/h3>\n

Tracking demand for products shouldn\u2019t be a one-off. You\u2019ll also want to keep collecting data day-to-day. That way, you\u2019ll build a database you can analyze and use to create accurate forecasts. You should use these forecasts to inform any inventory management decisions you make.<\/p>\n

When looking to forecast demand, there are several things to keep in mind. You want to look for patterns in your sales data to answer the following questions:<\/p>\n