Key Points to Improve Your Inventory Control
Inventory control in your e-commerce business is one of its most crucial components, or at least it should be. Imagine having a highly rated product that everyone wants at a very competitive price. Your online shop indicates there are 10 units left, and the last 10 have been sold. However, when preparing orders, you realize there are only 7 units left in stock. This can lead to negative reviews, loss of customers, and a damaged reputation for your online shop, which you certainly want to avoid. Therefore, optimizing your inventory control is essential for your e-commerce success.
There is abundant information on managing inventories as this practice has been around since the industrial revolution. In this article, we will explain the elements you should consider when improving your e-commerce inventory control.
Know Your Business
Understanding your business is a fundamental aspect of e-commerce inventory control. You need to know how much merchandise to order, when to order it, and how often. If you can't answer these questions, you might be wasting time and money.
- Estimating Your Sales: If your shop has been open for a while, you can estimate expected sales at certain times. For example, do you sell more or less in summer, and how much do you expect sales to increase during events like Black Friday? Predicting demand fluctuations helps determine the optimal stock level to handle these peaks successfully.
- Know Your Products: Which products have the highest turnover, and which sell more sporadically? Do you have seasonal products? Products with a higher turnover require more frequent supplier orders and closer stock monitoring for unforeseen events. Managing order frequency helps reduce storage time, lower costs, and prevent product value loss.
- Minimum Inventory Stock: Also known as the minimum viable quantity, this is the amount of product needed to continue selling while awaiting new stock, avoiding stock-outs. Calculating this by eye is easy for small quantities, but larger quantities benefit from computer programs for more accurate calculations.
Warehouse Organization
Good organization of your storage area helps save time and reduce costs. Properly locating and labeling products speeds up order preparation. Consider which products have been in storage longest to dispatch them first, using the FIFO (First In, First Out) method. This ensures products do not become obsolete. Organize products by characteristics, making those with higher turnover more accessible.
Ensure you have appropriate materials and areas for order reception and preparation. Ideally, have separate areas for reception and preparation. If not possible, avoid performing both tasks simultaneously to maintain product traceability. First, receive goods and locate each product in its assigned warehouse spot. Once organized, you can prepare customer orders.
Controlling the Flow of Information
To maintain recorded control over e-commerce operations, use ERP software connected to your online shop. This provides an accurate picture of stock, better catalog management, fewer order processing errors, and saves time and effort compared to manual methods. It enhances order management, inventory control, accounting, and invoicing. You will have all e-commerce information organized and secure in one place. Popular ERP software options include Magento and Holded.
Beyond Inventory Control: Logistics Outsourcing
If your business grows, managing your online shop's logistics may require:
- A larger warehouse
- More manpower
- More marketing and advertising
Consider contracting a logistics operator. You gain more storage space, qualified manpower, and inventory management software. This allows you to focus on growing your customer base and increasing sales. Choose a logistics operator committed to your e-commerce growth, offering valuable information and process improvements to reduce costs.
Conclusions
Optimizing inventory control is key to e-commerce growth. Outsourcing logistics operations to the right partner can significantly improve your online shop. For assistance with managing your online shop or logistics operations, contact us to help you sell more.
