As a business in retail, your products are your key assets. You need complete control over your assets in order to be able to attract new customers. It also helps retain existing ones to stay loyal. Now that’s a big thing in modern e-commerce, loyalty. It heavily depends on how a brand treats a customer. If you’re able to send their order quickly. If they’ll get it sooner rather than later. Is it in pristine condition? Are you able to anticipate their needs and preferences the next time around?
At the heart of that loyalty quest is your intimate knowledge and thorough management of your goods. While so many eager brands are busy building a name for themselves strictly through marketing and advertising, their inventory management begins to slip over time. You don’t want to find yourself among them, as you want your control of your assets to be complete.
Inventory management tips
To help you master the art of inventory management, there are several tips to help you protect your reputation and grow your sales over time.
Use your past sales for reference
The very first and one of the most predictive of all steps you need to take in order to reclaim control over your inventory is to conduct a detailed, data-driven forecast of demand. How else could you possibly know where to begin with ordering your products from your manufacturers, if you haven’t got the slightest idea of what your customers want, how much of it they want, and when?
To get a better idea of where you stand, take a closer look at your past sales. Cross-reference them with your inventory. Have you always ordered more of one and the same group of products only to have too many sitting in your warehouse while another, unexpected group is sold out and your customers would gladly buy more?
To reduce the discrepancies between the amount ordered and the amount bought, use demand forecasting. This is based on those recent trends among your shoppers. That will give you a much better idea of which products are in high demand. You can determine which perhaps need further advertising to increase profits in those sectors.
Rely on warehouse management tools
Unless you run a small store of hand-made goods that are mostly custom-ordered and made, using spreadsheets, email, and other simple tools is far too optimistic for a large-scale operation. Even medium-sized e-commerce stores cannot possibly rely on humans alone to manage their inventories, if nothing else, to avoid simple yet costly human errors.
Modern-day ERP solutions like NetSuite can streamline your inventory management. They can put everything in a single, centralized digital system. These solutions help reduce human error, which in turn cuts costs of overstocking and boosts ROI by preventing understocking.
Automated tasks in the cloud give you more leeway to allocate your workers to other, hands-on tasks instead. Tracking systems provide visibility across the board from the moment your product is created to when it’s signed for by your customer.
Try the FIFO system
This memorable abbreviation stands for a simple inventory mantra to help simplify your operations: First in, first out. This may seem like a random rule to apply with little promise to help organize your inventory. It can be a life-saver especially for brands that sell perishable goods with an expiration date. It is also good for brands that sell seasonally relevant products, or items that could go out of style and become less interesting to your customers.
By adjusting your marketing and advertising efforts, you can target customers specifically interested in the products that might have been sitting in your warehouse for too long. Whether you attach a discount to those, or you create contests on social media to generate interest, know when the time is right to implement these strategies so as to avoid overlaps with your next inventory order.
Cherish your vendor relationships
Although the previously listed tips suggest that the bulk of the job of managing your inventory comes down to numbers, the truth is somewhat of a mixed batch. A great portion of your inventory management success will depend on how you communicate with your employees. They are directly in charge of overseeing your inventory, as well as your partners who produce, send, or store your products until they reach your warehouse.
Relationships are key in your efforts to sustain your e-commerce business today. Sometimes the minimum ordering number of items may be too high for your customers’ needs. It’s important to give yourself some wiggle room to negotiate. You can lower the number to something both of you will benefit from.
If you treat your shipping partners fairly, your customers will always receive their goods in perfect condition and in time. Every single human figure involved in your inventory management process should be treated like a vital piece of the puzzle. The results will be imminent.
Inventory management tips
Although each e-commerce business will need to implement a unique inventory management strategy, these are some of the most widely-accepted best practices that can help any brand soar. Try implementing them into your own approach and keep an open mind to make adjustments as you move forward.
This guest blog post was written by Elaine Bennet. She is a digital marketing specialist focused on helping startups and small businesses grow. Besides that, she’s a regular contributor for Bizzmark Blog and writes hands-on articles about business and marketing.