Unless you run a dropshipping business—in which case you do not manufacture your own products—you probably maintain some sort of physical inventory, whether you are strictly an eCommerce store or a mix of online and brick-and-mortar.
Managing inventory is a necessary yet tricky task that affects countless business owners—how do you make sure that you have all the right items on hand when you need them? How can you organise your products in a way that maximises efficiency and doesn’t detriment your bottom line?
Every eCommerce business tries to find a strategy that works best for them. In pursuit of this strategy, here are a few tips to help you manage your store’s inventory:
Organise everything effectively
This statement is obvious—of course, you’re going to organise everything. Having every product in your storeroom or warehouse laying around without rhyme or reason will complicate your operations. That said, there are many ways of organising inventories, so where do you begin?
One of the most common techniques is keeping related products close together. If you run a furniture store, for instance, you will keep chairs amongst other chairs instead of next to bed frames. This method makes it easier for you and your employees to locate products that are more likely to be purchased at the same time.
Many eCommerce companies also keep the top 20 percent of their best selling times in aisles or nearest their packaging station; which reduces the distance employees have to travel and enhances efficiency.
Learn how ePOS can help you manage your inventory
You have probably already heard about the pros and cons of implementing inventory management software, and how ePOS can help manage your inventory. Having a centralised system makes a tremendous difference in staying organised and ensuring everyone involved in your operations is on the same page.
Instead of purchasing standalone inventory management software, however, you can take advantage of an electronic point of sale system that has the necessary software built-in. An ePOS system not only makes accepting electronic payment dramatically easier; it can help you keep an eye on all aspects of your business.
For instance, as soon as a customer purchases an item, the system automatically updates inventory records so that everyone knows what remainder of your inventory is available to sell, preventing double-sales that disappoint customers. ePOS systems can also assist with handling returns.
Make data-driven decisions
Not only can an ePOS system help you oversee your inventory in real-time, it creates in-depth reports about your sales performances (you can choose the timeframe, such as monthly, quarterly, or even daily). How many people purchased from you recently? What were the top-selling items, and which weren’t exactly flying off the shelves? What were the most popular times of day to shop, and what deals did customers take advantage of? You’ll save money by stocking your shelves with products that sell well and cutting back on those that don’t.
Having this kind of insight into your customers’ behaviour and the efforts you make to appeal to them provides you with opportunities to optimise your business strategy. Instead of operating through trial and error, an ePOS system enables you to make informed and data-driven decisions. ePOS software can also forecast future sales so that you can better prepare for different times of the year.
Use automation where necessary
If you process hundreds or even thousands of orders every day, then you want to minimise the risk of human error as much as possible. Use automation to streamline the shipping process—for instance, through a barcode system (which you can integrate into an ePOS).
Keeping track of products coming in and going out will be more accurate with a barcode system in place, and it prevents the likelihood of downstream costs if an order is incorrect and a customer has to send something back.
Use a technique that works for you
There are other inventory management techniques you can apply that work for other eCommerce businesses. For example, the Just-In-Time method entails purchasing products right before you expect to sell them, which reduces the potential you will hold unsold inventory for long periods of time; or the First In First Out technique, in which the first products you receive into your stock are the first to be shipped out once they are ordered.
There are pros and cons to each of these methods (and a variety of others), so determine which is most practical for you based on your sales, what your ePOS suggests, the size of your products compared to your storage area, your customers’ patterns, and other factors.
How to effectively manage inventory is a question every eCommerce business owner asks themselves sooner or later. What works for someone else may not work for you, so consider what resources you have available and learn from the mistakes of others.