“My shipment is delayed!”
“The product I want is sold out.”
“I received the wrong order!”
These are phrases no ecommerce company wants uttered by their customers. When this happens, it’s likely that those saying it won’t be customers for much longer! Yet for those who haven’t learned to execute their ecommerce inventory management properly, it’s an experience they’re likely to encounter. That’s why ecommerce inventory management is so critical to survive in today’s digital marketplace. But if you learn to master it, you can do even better: your business can begin to thrive as you achieve eCommerce success.
Key eCommerce Inventory Management Strategies Every Modern Business Needs
Effective ecommerce inventory management can provide many benefits. Your customers are happy, as their expectations are met. You can eliminate unnecessary expenses and put more profit dollars in your pockets. You can even minimize storage costs. But mastering ecommerce inventory management doesn’t happen on its own. You need some critical strategies in place, including:
Streamlined Order Fulfillment
Every ecommerce company has an order fulfillment process, from picking items off the shelf when an order has been placed to packing and then transporting them to the customer’s door. No matter what yours looks like, efficiency is key. As consumer behavior gravitates toward faster and faster shipping times, you must streamline your order fulfillment to maintain customer satisfaction and loyalty. Emphasizing picking speed and accuracy, as well as using technology like barcode scanning and automated order processing are just a few of the ways you can speed up your fulfillment operations.
Inventory Management Software
Simply put, if you’re processing inventory manually with pen and paper, you’re already behind. To achieve ecommerce inventory management success today, you need to implement inventory management software into your process. By embracing technology, you gain real-time insights into your inventory levels, sales trends, and order fulfillment operations. The right inventory management software gives you important visibility into your processes, as well as promotes easy communication between departments. As a result, you’re able to maintain strong quality control and efficiency throughout your supply chain.
Accurate Demand Forecasting
To truly master ecommerce inventory management, you can’t be regularly facing excess inventory or stockouts. Instead, you need to be able to maintain optimal inventory levels throughout changes in supply and demand. And how do you do this? Accurate demand forecasting.
Today’s ecommerce companies analyze sales data, market trends, and seasonal changes to predict future demand, enabling them to keep up with fluctuating customer needs and make better ecommerce inventory management decisions, including supply procurement and production, as well as replenishment.
Warehouse Layout Optimization
Your warehouses are a critical component of ecommerce inventory management. Not only does your warehouse location impact your product pricing and shipping times, your warehouse layout also can also make your inventory management much more efficient.
Just think about it: you’ll often take unnecessary extra time going far distances to replenish, find, and pick items (let alone search for them). It’s much better to organize your warehouse layout by item segmentation and place your most popular inventory in an easily accessible area.
Utilizing Buffer Stock
The unexpected always happens in ecommerce inventory management, so you need to plan for it. While you don’t want to have a bunch of excess inventory sitting around, it’s always a good idea to keep buffer stock (also called safety stock) on hand, especially for your most critical inventory items. Buffer stock allows you to keep up with customer orders when demand spikes or supply shortages occur.
ABC Inventory Analysis
If you have a lot of inventory, implementing an ABC inventory analysis can be a helpful tool for ecommerce inventory management. This puts your inventory into three categories (A, B, and C) with your most important (and most in-demand) inventory items in category A. This allows you to keep your inventory better organized, as well as make sure you’re keeping tabs on your most important items to ensure their availability and reduce losses.
Prioritizing Refunds Management
Today’s customers expect favorable and easy return policies. That means managing refunds well is a vital part of the ecommerce inventory management process. Your company needs to excel at reverse logistics to not only process returns quickly, but also prevent any restocking delays.
The Most Important eCommerce Inventory Management Strategy: Smart Warehousing
Effective ecommerce inventory management can lead to the business success your company deserves. But if you’re like many business owners, you don’t have time to master it yourself. That’s why partnering with a reliable third-party logistics provider (3PL) is perhaps the best strategy to get started.
At Smart Warehousing, we have the expertise and resources to manage your entire supply chain, from inventory management and order fulfillment to nationwide warehousing, transportation, and beyond. Contact us today to learn more.