The retail inventory management software market is predicted to grow at a compound rate of 7.6% from 2016 to 2023. It’s no surprise that e-commerce businesses are increasingly adopting multiple channels to boost their productivity.
As a result of more selling channels, there is a rise in sales opportunities and customer demands. This means e-commerce businesses need good strategies for inventory management that improve efficiency and reduce errors.
In this article, we give you effective tips for efficient inventory management for online stores. But first, if you need a refresher you can check this comprehensive What is inventory management software? guide.
Now back to our inventory management tips for online stores.
Warehousing is an important aspect of e-commerce selling via multiple channels. Hybrid warehousing combines third-party stocking and
Stock Allocation Techniques
Smart stock allocation is an important inventory management strategy for e-commerce stores. The three methods of stock allocation are equal allocation, trend allocation, and universal allocation. In equal allocation, you distribute the stocks in equal shares to ensure each selling channel has the same stock amount. Trend allocation depends on the figures of each selling channel. These stats show the individual sales channel demand for a particular product. Universal allocation involves allotting the same amount of stock for each selling channel.
Outsourcing Online Store Fulfillment
Outsourcing inventory is widely used by e-commerce retailers. You can track the inventory of your online store and transfer the whole fulfillment workflow to a third-party provider. For example, Fulfillment by Amazon takes care of warehouse stocking and shipping to consumer addresses by using the tested infrastructure and fulfillment capabilities of Amazon. If you use other sales channels than Amazon such as seller marketplaces, you can hire third-party fulfillment vendors like the Indian companies Zepo and 3XL Services Pvt. Ltd. These companies store client products such as electronics, consumer goods, and apparel in their warehouses.
Inventory management software needs to be seamlessly integrated to prevent cross-platform overselling. You can centralize your inventory management processes across multiple selling channels to minimize errors. By centralizing inventory data, you can understand which selling channel needs how much stock to be refilled in real time. This effective inventory management method is utilized by online stores that ship goods for all selling channels from the same warehouse.
FIFO – First In, First Out
FIFO is a proven inventory management method for e-commerce retail that is especially useful for perishable goods. You can ensure the stock that is stored first is shipped first. FIFO is also applicable for non-perishable products that can get worn out or depreciated. Plus, your company may launch new product models or packing designs. In these cases, your unsold stocks will become outdated, so you can use the FIFO method to
Learn the time it takes to fill empty shelves. If you are not able to fill the shelf before the stock gets over, remove that product from your online listing. This will help to avoid a bad customer experience as a consumer ordering that product will be disappointed. Calculate the turnaround time for your product materials and add the time taken to manufacture the product with the materials. Do this calculation for all your goods. This gives you the lead time for each product which is a good inventory management step.
Dealing with Returns
You can easily lose track of your stock numbers in the confusion of handling returns. It is important to keep accurate stock levels. Your stock levels should show the number of goods available. Buyers may decide to return a product and you need to determine what to do with it. Can you immediately put it back into stock or do you need to repair it? You can use a quarantine section to ensure your stock levels are accurate and show the right amount of goods available.
Get Rid of Deadstock
Deadstock is unsold goods that have been lying around for some time. This can be due to changing trends and fashions. Or, you may have over-manufactured a product resulting in unsold goods. So, how do you reduce your losses and move the stock? You can provide a discount or combine it with a complimentary item. Another method is to hire an influencer marketer to market these unsold products.
You need to invest in a quality inventory management software platform to boost your online store. TradeGecko is one of the top systems in this niche. But there are other equally good solutions in the market, so also look for a TradeGecko alternative. Feel free to share your comments on this article and on inventory management in the space below.