Inventory control is a massive organizational function and its complexity multiplies as your business grows. This is especially true for ecommerce businesses due to the number of SKUs, competitive landscape and inherent volatility. The pandemic only added to the speed of ecommerce adoption, leaving online sellers compelled to streamline and optimize their business processes.
Using a software solution that organizes inventory control for a successful ecommerce business is necessary, but choosing the right one can be complicated. On the one hand, you have comprehensive solutions that come with the “best-in-class” tag and then there are solutions that offer “functional value.”
While there’s a huge price difference between the two types of inventory solutions, you should not give up on either of their qualities. Therefore, you need to go for the right package that helps your business realize its true potential.
In this article, we will go through various areas where the right ecommerce solution can help online sellers grow their businesses. Let’s begin:
Online selling is easy to get started with, but as time passes, business owners realize that they need to take care of many priorities. These may come in the form of business opportunities, expansion hazards, employee management, marketing plans, target platforms and audience and product life cycles..
With growth, the management of inventory control can become a complex challenge. Most online sellers begin with manual processes to keep inventory in check and then later switch to Excel or Google Spreadsheets.
Spreadsheets provide the required utility in the beginning, but as your operations grow, they become unreliable. Inventory errors start becoming common due to potential duplicate entries, false entries, lack of coordination and collaboration. In order to keep manual systems running, you need to implement stringent working policies and rely on how well your employees comply with them.
The chances of making errors multiply depending on your selling volume, headcount, number of selling channels and SKUs. These errors lead to underselling, overselling and order fulfillment problems.
Here’s an example to illustrate the issues faced by online stores when selling across multiple platforms and relying on manual processes. Consider the case of a pet products store called Mandy’s.
Mandy’s is a fresh startup that has grown rapidly in the last few years. They recently started selling on multiple platforms and bought a second warehouse. Their expansion has contributed to their overall presence. Despite high demand from the market, their business is suffering due to internal setbacks. Upon analysis, Mandy’s found that inventory related troubles were at the root.
Here’s a list of management factors that Mandy’s needs to adopt to be in full control of their inventory:
It is critical to know whether your order fulfillment operations are on schedule or not. Processes like order pickup, packing and preparing for shipment turn out to be challenging if you don’t have a clear visibility into your operations. This gets especially challenging when selling on multiple online storefronts, because each of them need to be updated in real time.
Mandy’s found it quite difficult to navigate through multiple platforms like Amazon, eBay and Etsy. Add to that the challenge of managing stock across both of their warehouses. Accurate management of order fulfillment requires constant updates to stock after each order is placed.
Mandy’s started to either undersell or oversell their products due to lack of visibility. It was caused due to mistakes like improper bookkeeping, not performing timely inventory audits, work duplication and data entry errors.
Understocking and overstocking are caused by the same errors and demonstrate that businesses like Mandy’s need proper inventory control through automated software solutions that integrate physical operations with digital record keeping and automated information processing.
Demand forecasting is another area where most growing businesses like Mandy’s struggle. It is nearly impossible to devise insights using spreadsheets since they require you to use formulas every time you want to make sense of data. This leaves no way to be sure of tracking past sales trends and correlating them with current indicators.
Mandy’s found that they needed product bundling capabilities which required them to make complex calculations. Marketplaces like Amazon also require sellers to change pricing dynamically depending on their competitor’s activity.
For instance, if a competitor is out of stock, you can increase your selling price without fearing the loss of sales. Conversely, you would need to lower your prices if your inventory has been sitting for long and is nearing its expiration date. This is where dedicated inventory tools come in handy.
Logistics play an important role in determining a brand’s success. Logistics operators work under tight deadlines and you need to be ready with sales insights and be ready to ship products at the right time to ensure smooth order fulfillment.
Mandy’s found that returns processing and order tracking requests were consuming a huge chunk of its customer service staff’s time.
Having an inventory management and control system along with API-based integrations with third-party logistics partners can help solve this problem as your customers can track and return orders by themselves through a self-service portal.
An ecommerce inventory control solution can help address these concerns and help scale your business with the help of automation, standardization and the streamlining of your operations. To get a better understanding of the benefits offered by these solutions, have a look at the below section:
Inventory software helps collect data, process information, delegate work and provide reporting. Inventory software can automate order processing, order pickup and packaging, returns processing and reporting analysis.
Your staff members only need to focus on their core work without worrying about documentation or other administrative formalities.
When using automated solutions, you no longer need to note down each and every transaction manually. You can turn the entire recordkeeping process digital by integrating a barcoding solution with your inventory software. This helps in tracking the exact location of stock within your storage facilities, order pickup and packaging, along with report building.
These solutions help order the right quantity of each SKU depending on historical demand and current trends. You no longer have to manually track how long inventory has been sitting in your storage facility and if you need to sell it due to expiration.
It will prompt you to clear aging inventory by creating a stock clearance sale, offering discounts or through product bundling. Thus, you can expect minimal inventory wastage as it helps order the right products and clear your stock at the right time in appropriate quantities at the right time.
Without a dedicated solution, you can often miss delivery deadlines, send out expired products, fail to provide order shipping data and make returns a headache for your customers.
Without software, you aren’t able to confirm orders, may oversell items and wind up dealing with product backorders. With an ecommerce inventory management and control system, you can solve all of these problems and improve the customer experience by offering consumers transparency and control.
For instance, you can track a customer’s order history to identify repeated purchases over fixed intervals. You can send them order confirmations thereby streamlining operations on your end while improving the customer experience.
With the digitalization of all processes, insights and resource data, you get a clear picture of how your ecommerce business is performing and if it is facing any bottlenecks.
You can exercise greater control over your sales strategy, order fulfillment, warehousing, cash flow, sales trends, demand forecasting, inventory handling and marketing. Using an ecommerce suite helps unify all teams and orchestrate their efforts in concert to support your company’s growth.
Last but not least, you gain significant control over financial aspects such as total sales for a given period, taxes, compliance-related filings and all accounting recordkeeping. Software facilitates inventory audits and plans out your expenses based on historical data. These solutions take the guesswork out of the equation offering a better understanding of your business finances.
Here’s a simple step-by-step overview to finding the right ecommerce inventory management software for your business:
It is evident that ecommerce inventory management software provides you with the ability to manage and scale your operations methodically. In the absence of such solutions, it becomes extremely difficult to operate since you have little to zero visibility of your organization, its expenses and technical difficulties. Meanwhile, your staff continues to struggle with productivity issues due to errors and manual data entry.
The right ecommerce inventory management and control software helps streamline all aspects of your online selling business and increases your bottom line. If you need further guidance on ecommerce inventory management solutions for your business, get in touch with Cin7 now!
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