Managing the inventory of an eCommerce business can be quite complicated. It gets harder as the number of products increases. An efficient inventory management strategy is essential for running a successful eCommerce business. Retail eCommerce platforms are likely to fail if they fail to manage their inventory or deliver their products properly. They should have a clear-cut inventory management system that works best for your business.
The digital age gives the advantage to customers to purchase whatever they want in a couple of clicks. As online sales have increased drastically, there has been significant growth in the eCommerce industry. No matter the size of the company, the basic inventory, management includes sourcing, storing, and selling. You should also look into how much you should sell, how much you have to stock, where to store it and how long. You should have proper control over your inventory to run a business efficiently. Businesses should evaluate the average shelf life of every product, these products should be priced and optimized to sell within their shelf life.
A customer-centric market always stocks up to meet the customer’s needs. It is important to maintain customer relationships, if you fail to do so will have consequences. You should never run out of stocks to meet your demand.
Here are some inventory management techniques that help eCommerce businesses grow.
5 Inventory Management Techniques for eCommerce Businesses
1. Understand the product demand
Understanding your market is one of the essential parts of inventory management. You need to understand your customer behavior. You need to understand how the demand for your products fluctuates over time, especially if you’re starting a new business. You can take advantage of tools like Google trends to analyze the trends to get detailed insights about your market.
2. Predicting future demands
You could use your past sales d to forecast future demands for your product. This could also help you to analyze when your sales are the highest in the past year. You can stock your products throughout the year based on the seasonal demand. Your products will get maximum sales without running out of stock with proper planning and strategies.
3. Set a minimum stock limit for your product.
You should set a minimum stock limit for every product that you sell based on their sales. You should set the lowest possible number of inventories to meet your customer needs by considering the demand of the product and the time taken to reorder the products from the vendor. You should always maintain the minimum stock of the products to meet the customer demand and increase the stock as the demand increases.
4. ABC Analysis.
ABC analysis helps you prioritize products into high value, moderate value, and low-value products. This helps your business to increase its efficiency of the business and save money.
The inventory is categorized as
(A) high-value products with a low frequency of sales
(B) moderate value products with a moderate frequency of sales
(C) low-value products with a high frequency of sales.
You should be able to understand which products are performing the best in the market and which aren’t to optimize the inventory accordingly.
5. Inventory management software.
Investing in inventory management software is one of the vital aspects of running an eCommerce business. It helps to scale and optimize your inventories as per your need. It makes sure you are never overstocked or understocked. You could use the information from the software for further analysis to predict future trends.
Managing inventory can be complicated. Lack of knowledge can get you in deep trouble. Both overstocking and understocking can affect your sales significantly. Implementing Inventory management can overcome various challenges faced by eCommerce businesses.
At Agile e-Platform, we provide inventory management solutions tailored for eCommerce businesses. We will streamline your inventories which will make the whole process much more efficient and help you grow your business.