6 Inventory Management Tips for New Ecommerce Business Owners
Thanks to the variety of resources and information online today, almost anyone can launch and grow an ecommerce business with very little experience. However, certain issues tend to trip up many inexperienced entrepreneurs when their ecommerce business starts to grow. One crucial issue is inventory management.
Six Tips to Help You Along
Managing inventory is easy when you’re selling only a few units a day. When you start to move hundreds or thousands of units per day, though, keeping on top of everything suddenly becomes a lot harder.
Small issues can so easily blossom into major errors and the results can be serious. If you are currently at a critical juncture, where inventory management could make or break your ecommerce operation, the following tips may help get you back on track.
1. Collect Lots of Data
Efficient inventory management depends on accurate forecasting. The key to that is making sure you have access to the correct data.
To be honest, this is something most ecommerce business owners don’t do a good job of, so if you want to get inventory management right, you need to collect and organize the right data so you’re in a position to understand what’s likely to happen over a given sales period.
2. Stay Organized
An organized warehouse is an efficient warehouse. Whether your warehouse is a massive 25,000-square-foot commercial space or the spare bedroom in your apartment, organization is essential. Make it a point to clean up and reorganize all your inventory at the end of every single workday, if you can.
3. Centralize Inventory Control
Inventory management is fairly simple and straightforward when you’re selling via just one channel. Things get substantially more complicated when you add further channels and sales platforms.
If you want to make sure you stay on top of order processing and avoid under- or over-selling, you should invest in inventory management software that centralizes inventory control. Centralization of inventory across an array of sales channels means you won’t have to worry about losing track of on-hand levels of stock.
4. Build Good Relationships With Suppliers
It’s impossible to be skilled at inventory management if you don’t have solid relationships with your suppliers. Not only do good relationships eventually help you negotiate lower minimums and better deals, but they can save you in a bind.
“A good relationship isn’t just about being friendly. It’s about good communication,” entrepreneur Casandra Campbell points out. “Let your supplier know when you’re expecting an increase in sales so they can adjust production. Have them let you know when a product is running behind schedule so you can pause promotions or look for a temporary substitute.”
5. Reduce Returns and Exchanges
Do you know what really messes up inventory management? Returns and exchanges. They mess up inventory levels and create nightmares for accounting and restocking.
Some customers are naturally going to return items, but you should do your best to avoid situations that lead to frequent returns. This includes educating customers better prior to purchases.
6. Perform Regular Audits
The final tip is to perform regular audits. The more you audit your inventory, the less likely you’ll arrive at the end of a quarter or a year and find yourself trying to deal with major discrepancies.
Audits also help with monitoring internal theft, ensuring proper valuation, and reconciling accounts. Performing spot audits every few weeks will keep you in line.
Always be Alert
In order to be successful at inventory management, you can’t allow yourself to sit back and relax … ever. You need to be alert always, and cognizant of what’s happening with sales, suppliers, customers, warehouses, and everything else that goes into this crucial facet of running an ecommerce business.
How are you doing on this front?