If you run an e-commerce business, you likely handle a lot of stock. You’ll be bringing in bulk orders from suppliers, and these will be distributed to customers. Then the process repeats again, and again, and again.
While this might seem to be going fine, the way you manage your inventory could be having a serious impact on your profit margins. If you want to streamline the process, and save time, resources, and money at the same time, read on for advice on improving your inventory management.
Automate the system
To start with, take a close look at the current system you have in place for inventory management. If you are using an old, manual system for your inventory, it’s time to change to a modern solution.
Thankfully, inventory management software is readily available for businesses to utilize. This software comes with a wealth of benefits. For instance, you can begin by simply calculating your inventory turnover. With this data, you can properly arrange the rest of your inventory management plan.
Once the system is tweaked and ready to go, you can start automating processes, analyzing trends, and planning for success in the future. Inventory numbers will always be up-to-date, orders will be fulfilled, and it will prevent stock from being undersold or oversold.
This makes anticipating product demand difficult for your business. When you launch a new product range, it can be particularly tricky to know just how much stock you should acquire.
Nevertheless, it’s not impossible. Your inventory management software and past figures will assist with painting a clearer picture. You can look back at everything from seasonal trends to yearly product sales. This data can supply an accurate estimation as to how much stock you will need to feature at any given time.
Admittedly, this isn’t conceivable if you are launching a new e-commerce business and have no past figures to fall back on. In this situation, it is simply a case of learning on the job. Mistakes will be made, but the experience will limit issues in the future.
Have a contingency plan in place
Even with an inventory management system and past experience, there are certain negative situations which are unavoidable.
For example, a supplier might run out of a product which you want to stock. There’s also the possibility of a product receiving an unexpected recall. You might even hit a sales spike, which causes one of your items to go out of stock.
While unavoidable, you should still have some form of contingency plan ready when needed. By doing this, you can help avoid upset customers and large profit loss.
Maintain communication with suppliers and customers
Communication is vital with every aspect of business, and that includes your inventory management.
You will want to maintain a strong relationship with your suppliers. This will promote open and honest communication. This means that, if suppliers were to raise prices or run out of a certain product, they would get in touch to let you know as soon as possible.