If you have a retail business, it is essential that you manage the available inventory of products for sale in a detailed manner. Even more so if you have decided to migrate from a physical business to an online store.
Even if you have experience managing your inventory physically, keeping an overview of an e-commerce inventory can be very different and, at times, frustrating.
Benefits of maintaining an up-to-date inventory
Every retail sales business must know exactly how much product it has available for sale. This sounds easy, but it’s not always the case.
Especially when sales exceed the control process and the open and unprocessed orders may not be discounted from the stock, causing errors in the actual figure available.
Inventory management for e-commerce needs to take into account that unattended open orders must coexist, so it is necessary to separate the stock of the store into that which is available and that which is set aside to fulfill an unattended order.
Types of inventory management
Although these types of stock management are designed for the monitoring of items in a physical store, it is easily scalable for inventory management for e-commerce business.
- ABC analysis: basically, this involves classifying the items you have in your store based on importance, price and sales volume, whereby A products are those that are high-end and need strict control and low stock, B products are the medium products that require moderate control and the price and sales volume are not representative, and C products are low-value items but with high sales, so they require large stocks.
- FIFO method: the FIFO (First In, First Out) method allows you to always have a fresh inventory, and not only is it applicable to grocery stores, but by having a proper inventory rotation, you will avoid losses due to damaged products.
10 tips for best e-commerce inventory management
1. Analyze and categorize key products: You should create a database that allows you to verify which products you sell the most and then create a safety stock of these products. This process will also allow you to analyze whether any of your products are not generating enough sales to keep them in your catalog.
2. Establish the minimum stock levels: At this point, you should analyze what the minimum acceptable inventory for each product is, taking into account the delivery times of your suppliers. That is to say, based on the logistics time of restocking, you need to identify how many units to have in inventory in order to avoid losing a sale.
3. Conduct audits on an ongoing basis: It seems logical, but companies often forget to take into account the fact that they need to verify that the available stock is really there. Whether it be due to internal theft, because your supplier did not supply correctly, or because some of your products are damaged, there is a possibility that your inventory is not actually available.
4. Create strong relationships with your suppliers: This point will help you to have quick access to any missing product so as not to lose out on the sale. Or it will allow you to negotiate an exchange or return of the products that are not performing as you need.
5. Look for a healthy inventory turnover: Analyze how many days of inventory you need in your store; many times, having high inventories of products that do not rotate enough can result in a reduction in your profit.
6. Seek to save storage costs: This is useful if you have opted to sell through more positioned marketplaces such as Amazon or Mercado Libre. These offer the possibility of storing your own inventory in their warehouses so as to be able to ship faster, but comes at an extra cost.
7. Plan for a possible contingency: The circumstances are not always within your control, but you can be prepared for any eventuality. It may be that the sale of a product skyrocketed, or maybe a package was even lost or damaged.
8. Understand the market: Stay on top of market trends, analyze social media hashtags and pivot your strategy to always have the products that are trending.
9. Try Dropshipping: It is not always necessary to have stock to make sales: this sales method allows you to sell the stock that manufacturers already have around the world, meaning that you only invest your time making the sale.
10. Integrate an inventory management system: You need to take your project seriously – having your inventory in an Excel spreadsheet will cause you headaches in the long run. There are several automatic inventory managers on the market that can be natively integrated into your website.
Get to know some of the software for inventory management for e-commerce business
The market offers several technological solutions that allow you to keep your online store’s inventory stock healthy. From the most sophisticated to the most commercial, analyze and evaluate which is the perfect solution for your business.
- Woocommerce: This native WordPress manager is easy to install on your website and allows you to have control of your inventory automatically, as it is discounted based on the sales you generate from your website.
- Magento: This solution is more professional and requires more adaptation to your store style, but in the end it gives you total control, even taking into account losses due to stock shortages.
- Shopify: This solution allows excellent e-commerce stock management by combining several add-ons to fully automate the processes of your store.
Analyze which is the solution that best suits your needs and integrate it into your online store project. Remember that there are other ways that will help your project to be much friendlier for your customers, such as payment gateways.
These gateways allow the sales process to be secure and reliable for your customers. At PayRetailers, we care about offering integrations to e-commerce inventory managers to create adaptable and easy-to-use solutions.