Everything you need to know to prevent deadstock from accumulating

It’s common practice for retailers to have a bit more inventory than they think they’ll need. It’s for contingency, and it’s called safety stock. The reason for doing it is sound: it means never having to turn a customer away.

But sometimes miscalculations are made. Items may go out of style or something in the market may change. Either one of these instances will result in a business being stuck with the extra inventory, and when that happens the goods turn from safety stock to deadstock.

In this blog, we’re going to look at deadstock in detail – how you end up with it, how to deal with it, and how to avoid prevent deadstock in the first place.

 

Deadstock – the definition

If you have inventory in stock that’s been gathering dust on a warehouse shelf for a long time, you’re holding deadstock. It’s stuff you can’t sell and are probably never going to sell.

 

How good stock becomes deadstock

1. Not enough demand

An item was selling like hotcakes before it wasn’t, or items you thought would do well didn’t. Alternatively, outside forces like extreme weather or a downturn in the economy could have impacted your sales.

2. Too much competition

You’ve stocked up on the same products that everyone else has. Maybe you’re a small player that can’t beat the prices of larger competitors, or maybe the market has become too flooded with those particular items.

3. Slow reactions to the market

You waited too long to react to slow sales and didn’t offer discounts when you should have.

4. Not getting customer input/not doing research

Someone didn’t put enough effort into getting feedback from your customer base through methods like emails or online reviews, so you weren’t aware of the kind of products customers wanted to buy.

5. Low-quality products

Some of your products were of low quality, customers were not happy, and they returned them. Or maybe the low quality resulted in bad word of mouth.

6. Predictions weren’t right

Maybe data and research told you that particular items would be good sellers, but the information didn’t take everything into account.

 

Good reasons to do something about deadstock

Deadstock can have negative effects on your business. Here are a few of them:

  • It occupies space you can and should be using for items that move.
  • It stops you from buying new items.
  • It ties up your cash flow – money you could to buy more popular products.
  • It increases your warehouse costs, like cost for employees and storage space.

 

Ways to prevent deadstock

If you’re in the business of sales, you know that getting inventory planning right is important. What to order, when to order, how much to order, the list goes on. If you get any of these areas wrong, you’re in danger of ending up with deadstock. It can happen to anyone, but there are steps that can be taken to make it less likely.

1. Invest in inventory management software.

Ditch your spreadsheets. They’re not only old school, they’re time consuming and prone to error. Automating your buying decisions with the data inventory management software (IMS) gives you is efficient and much more accurate.

The precise data, reports, and advanced analytics you get from IMS software does more than help you identify best-selling items, it will also separate out those that aren’t selling quickly. When you have that information, abra cadabra, no more deadstock.

2. Improve your forecasting.

Product forecasting analyzes competitors, works out pricing strategies, studies market trends, and “learns” customer preferences. Put together, this information gives you an invaluable forecast on your market, and when you have this information, you’re much more likely to acquire inventory that’s going to sell.

3. Use your buyback option.

If you have an agreement that allows you to sell unsold items back to the supplier, this is a good time to use it. If you don’t have such an agreement in place, try to get one. Of course, you should always check to see if buyback is even an option during early negotiations with your suppliers.

Keep in mind that those manufacturers and suppliers that do offer buyback are usually the more reputable ones, and that the products they handle are usually high quality.

 

How do you get rid of deadstock?

If you do find yourself saddled with things you can’t sell at their standard price, there are things you can do:

1. Have a clearance sale.

This is the time-honored method for reducing unsold stock. You don’t want these goods tying up your storage space for years, so anything that has been hanging around for six months should be discounted. You could start this at 20% off and increase that amount if you have to.

Advertising clearance sales and other discounts on your website and social media is the best way to get the word out. Sending emails about the event to your mailing list should also get good results. And depending on the size of your company and the market you operate in, you could consider investing in local radio and television advertising.

While this strategy should help you clear out a lot of deadstock, it’s still way better to avoid having it in the first place. If bad inventory management has been the cause, it’s time you consider a good automated inventory management system like Cin7.

2. Take advantage of the fear of missing out.

There is a marketing term called “Fear of Missing Out.” It’s about creating a sense of urgency in shoppers, letting them think that if they don’t buy something right there and then, they’ll be missing out.

Marketing strategies for this usually boil down to putting limits on offers. These could be in the form of an end date to a sale, or letting customers know that there’s only a limited number of items on offer. In other words, you could advertise an “end of sale by Thursday,” or “50% off this week only,” or offer “last (x number) of products left.”

When it comes to presenting deadstock as a deal in this way, the underlying point is that you’re appealing to customers who are more interested in getting a bargain than the product. That doesn’t matter, though; you’ll still be offloading your old, otherwise unwanted, goods.

3. Bundle.

This option is about grouping similar products together and offering them at a special price.

By using this technique, you could combine something in your deadstock with top-selling items. You won’t get top-dollar for everything, but you will greatly minimize your losses.

 

Wrapping up

Deadstock is a drag in more ways than one, and it’s important to minimize it. Technology is the best and most reliable way of doing this. So why not invest in a robust inventory management system like Cin7?

Cin7 inventory management software is an ideal choice for businesses of any size.  By automating workflows and stock levels in real time, you’ll always know what you have and can ensure you’re stocking the right amount of the right product. That means an end to deadstock. And if that’s not enough to streamline your business and improve your bottom line, the software also connects all your storage locations and marketplaces – online and offline – into one system.

If you’d like to know more, contact our Cin7 team and arrange a demo today.

The strategic importance of order processing in supply chain management

For an online sales business or a manufacturing company, it’s all about the supply chain. It covers everything from the procurement of items for sale, or raw materials for the production process, to delivery of the items or products. Controlling the supply chain and keeping oversight on it is, as would be expected, supply chain management (SCM). Order processing is the central pillar of SCM; in a way, it’s the heart of the whole fulfillment process.

In this blog, we’re going to take a close look at how order processing works, and explore its importance to supply chain management.

 

What is order processing?

Order processing goes into effect the minute customers select and pay for goods online and continues until those goods are received. Broad in scope, it follows defined steps to get to that end point.

Here’s how the process breaks down:

Step 1: Orders are received

As soon as customers have filled their online carts and paid for their goods, their orders are transmitted to the warehouse or fulfillment center. Here they’re broken down into their component parts, which means product, quantity, size/color (if relevant), etc.

If the sales or fulfillment company is large enough, these order details are processed by an automated inventory management system (IMS). This sophisticated software will know if customers’ goods are in stock, and if so where they are. In essence, the system is able to determine the best warehouse to route the order to; and if some items aren’t available right away, it will give instructions to send them as, and when, they are. In addition, if a customer has put in more than one order, the IMS can consolidate them into one package.

Step 2: Items are picked

Picking describes the actual job of collecting items for an order from their storage spaces. Pickers do the job. Warehouses can be large—some are gargantuan—so getting organization into this process can be complicated. Picking can either be done on an individual-order basis, by warehouse zone, or in bulk – which means picking for several orders at the same time.

Irrespective of the method used, the whole process starts with a picking list that itemizes everything according to its storage location and sets out a route round the warehouse for the pickers to take. The aim, of course, is to cut down the picking time.

Step 3: Orders are sorted out

After picking, items are taken to a sorting area. If they were picked in bulk or by warehouse zone, this is the area where they’ll be sorted into their individual orders. This is also the time when items are checked against the original orders to make sure everything is there, is in good order, and of high quality.

Step 4: Order are packed up

Making sure the appropriate packaging is used is trickier than might be thought. The box itself should be the right size for the items and strong enough to hold them during shipping, and the padding inside should be enough to protect the contents, but light enough to keep transportation costs down. Sometimes this padding has to be specialized. If food is being packed, for instance, it might have to be kept cool with gel packs or dry ice.

After being packed up, shipping labels are attached.

Step 5: Orders are shipped

We’re now near the end of order processing. After boxing and labeling, shipments are organized by geographical location and assigned to their respective delivery trucks. Size and weight might also be a consideration when selecting transport: extra heavy items, or those that need refrigeration, will need specialized trucks. At this stage, the type of delivery a customer paid for also has to be taken into consideration. Expedited delivery, for example, will be given priority. The point is that it’s important to deliver an item at the time the customer expects it.

Step 6: Orders are delivered

Order delivery is the last step of the order processing system. The customer can choose a particular time to have their order delivered, or they can leave special instructions, like having the package be left with a neighbor. If a customer has opted for Cash on Delivery (COD), the delivery drive will be the one who collects the payment.

 

The importance of order processing in supply chain management

Order processing is the core, the beating heart at the center of the supply chain system that everything else more or less has to service. In essence, for any sales, fulfillment, or manufacturing entity, processing orders – getting them together and getting them to the right customer in time – is what they’re about. It’s true that without proper management in any area of the supply chain businesses won’t perform at their best, but when it comes to order processing, its efficiency, speed, accuracy, and cost-effectiveness are actually the determining factors of success and, ultimately, profit.

Whatever way you look at it, though, supply chain management is a complex operation. That’s why it’s a good idea to automate it.

The upsides of automation are:

  • maximized profits,
  • minimized costs,
  • improved customer satisfaction,
  • increased market share,
  • reduced workload for employees, and
  • an overall boost to the company’s brand and reputation.

 

Final thoughts on order processing and its importance to the system as a whole

Having looked closely at the complete supply chain, we can see that everything centers on the order processing part. Putting orders together and getting them to customers is, in effect, the commercial activity that reasons for the company’s existence.

Automating all or some of the areas of supply chain management with an inventory management system can be of great benefit to a company, both logistically and financially. Cin7 is one of the best.

To learn more about how Cin7 can help your business, you can book a demo from one of our experts by clicking here.

What does “awaiting delivery scan” and other USPS notifications mean?

Globally, the number of parcels shipped has increased dramatically in the past decade. In 2020, there were more than 131 billion shipped parcels, and by 2026 that number is expected to rise to 236 billion. This volume is forcing sellers and shippers to improve their services, and that includes the ability to track packages.

Tracking has become very important to online shoppers. Their eagerness to get their purchases has them checking the delivery status almost from the minute they click the “buy” button. There’s this need to see where the packages are in the system at all times, up until they’re delivered to the door.

Sometimes, though, tracking comes up with a message that indicates a glitch, though there’s no explanation what that is. One such message is the “USPS awaiting delivery scan.” In this blog, we’re going to explain this term and several other notifications of the tracking system.

 

What exactly does the “USPS awaiting delivery scan” mean?

It could mean two things:

The package may not have been scanned at the last checkpoint when it was loaded onto the mail truck. The item will be in the truck and will probably be delivered on time, but without being scanned before loading it up, the tracking page will still show the delivery scan holdup.

Another possibility is that the package wasn’t scanned by the mail carrier when it was dropped off at the buyer’s house; or if they did the scan, it didn’t register in the system for some technical reason. Either way, the package will have been delivered.

 

Other notifications on the USPS online tracking system

These are the most common ones:

1. Package acceptance pending

Getting this notice is an indication that the post office has received the package, but that it’s waiting to be put into the system. What’s happened is that a seller has taken a large number of packages to the post office at the same time, and while they’ve put a separate shipping label on each individual piece, they’ve presented the postal worker with a single itemized sheet. It’s a way to speed things up at the post office. It’s that single sheet that gets scanned. The post office knows it has all the packages, but it hasn’t yet scanned them individually. When the packages are individually scanned, the online notification will change from “acceptance pending” to “accepted.”

2. USPS awaiting item

As this term indicates, it means the postal service hasn’t received the package, or hasn’t actually put it in their system yet. The postal service “knows” it’s going to be getting it because of a tracking number on the shipping label. This tracking number shows up in the USPS system the minute the seller generates the shipping label. So, until the seller drops the package off at the post office, “awaiting item” means just that.

3. In transit

When this is the message, the package is going through the postal service system and is safely on its way.

4. Out for delivery

This is the good one. It means that the package is on the mail truck and is scheduled to be dropped off. Most likely, that will be at the regular time the mail is delivered.

5. Status not available

A message like this on the tracking page could indicate that USPS is having some technical problem, or it may just mean that the system is not updating. On the other hand, it could be a sign that the package has been lost or damaged.

 

What to do when your customers receive the awaiting delivery scan notice?

Having a notice like this on the tracking page won’t show the seller in a good light. In a way, it looks like the seller is sloppy and doesn’t care much about getting the package delivered on time. That’s negative PR that could make a customer lose confidence.Fortunately, there are ways for the seller to overcome the delivery hitch and come out looking good.

Good communication is a good start. Personal emails that keep customers abreast of the shipping situation are not only reassuring, they tell customers that you care.

Another way is by having a top-notch inventory and order management software, one that helps you get your products out and delivered quickly and efficiently. Being able to stay on top of logistics through a system like this is really important for good customer relations

If you’re in the market for a good order management system, you might want to take a look at Cin7. Cloud-based, it will streamline your entire fulfillment process and leave your customers feeling like they’ve been treated well. Part of that comes from our third-party logistics feature, which puts you in touch with these service providers when you’re looking for a faster way to deliver your goods.

Call one of our experts today, and book a demo.

PO systems for small business: Why your business needs one

If you are like most small businesses and startups, you work as a small team and collaborate with a few trusted suppliers. Even though you may know your suppliers well, you should still establish a system of using purchase orders (PO) for purchasing items. A PO is a formal document that can be referred to in cases of payment disputes or quality problems.

Once you are using POs regularly, the next step is to invest in an order management software that allows you to manage POs and other aspects of fulfillment such as tracking orders and expenses, resupplying stock and updating inventory. Read on to learn more about POs and Cin7’s automated order management system.

 

What is a purchase order (PO)?

A purchase order (PO) is a formal document issued by the buyer and sent to the seller listing all the required goods/services in desired quantities. The seller verifies the PO, delivers the goods to the buyer, and sends an invoice for the completed order. Thus, a PO acts as a legally binding document for buyers and sellers, as both parties can track the ordered items.

Ideally, a PO lists all the required items, their types, quantity, and prices in detail. This is important in case there are problems with the order. For example, if you order 15 printers and the vendor has only sent 14, you will have the PO for validating your order. On the flip side, POs are quite essential for sellers too, as POs will act as proof for the order placed by the buyer. For instance, if a buyer argues about the order quantity, the seller can always hand over the PO to the buyer. It’s a win-win for both parties.

 

What is a PO number?

A PO number is a unique number assigned to every PO. A PO number can help both buyers and sellers track the goods or transactions. In fact, it acts as a quick reference code for businesses to verify orders.

For instance, if a customer has a query and contacts your office, anyone from your accounts department can check their order just by entering the PO number. Businesses often use the PO number to validate the invoice against the purchase order for any mismatch.

 

What is a PO system & how does it work?

A PO system helps businesses create POs effortlessly and digitally.. All you need is to fill up your goods requirements in the desired amount and enter the supplier details. The system generates the PO with a unique PO number and sends it to the supplier instantly.

The PO system streamlines the entire order management process, including purchase requisition, supplier approval, receiving goods, getting invoices, and closing the payment. In short, a PO system is not only about purchase orders but also simplifies all the processes associated with order fulfillment. Furthermore, the PO system maintains the entire business transaction record that both parties can quickly refer to. Thus, businesses can track their orders, view order histories, keep their budget in control, and buy the right amount of stock.

A PO system is essential for any product-based business, regardless of size, as it manages inventory, purchases, orders, and invoices daily. Since the PO system aids transparency and accuracy in managing orders, you will have perfect inventory control, knowing what to stock and what to cut down on.

 

Why should small businesses invest in a PO system like Cin7?

Creating manual POs, maintaining spreadsheets, and following up with suppliers over the phone can be time-consuming and energy-draining. Cin7’s Order Management System offers significant benefits to your business.

1. Save time

Cin7’s OMS saves a lot of your time by simplifying purchasing processes and minimizing manual data entry. You can save the supplier details once and directly send your item list rather than manually entering the supplier details every time. You can readily refer to all the order details and transactions in the PO system. Plus, your employees need not spend time on calculations as the system does it accurately.

2. Gain better control over business processes

Cin7’s order management system is highly transparent, allowing you to view all the business activities in real-time. Hence, as a business owner, you can make data-driven business decisions. For instance, you can compare all the suppliers, their rates, quality, and sales movements. Thus, you can negotiate better deals with the suppliers while delighting your customers with beneficial products that add value to them.

3. Prevent overstocking and understocking of goods

Understocking goods can affect your reputation while overstocking items can dent your profits. With Cin7’s order management system, you can maintain optimal inventory levels at all times. You can automate the system to send POs to suppliers when inventory falls behind certain limits. Can replenishing goods get any easier? Thus, you can ensure you have the right amount of goods at the right places.

 

Summing up

Giving your employees a feature-packed tool like Cin7s order management system will allow them to work more efficiently as the software streamlines the entire backend process of managing orders. Additionally, Cin7 integrates with accounting software like Quickbooks and Xero, and you can import all your business data into it and keep track of your business’s finances. Thus, you can gain real-time insights into your business and intervene earlier to grow your business faster. Talk to Cin7 experts today to learn more about Cin7’s features and functionalities.

A complete guide to ecommerce fulfillment services and their processes

If you are thinking about putting some or all of your sales business online, you probably have many questions about order fulfillment. What’s the best method for your company? How do you make your warehouse or stocking facility perform at maximum efficiency? How do you ensure that orders go out on time? In this article, we will help you answer them.

 

What is ecommerce fulfillment?

Ecommerce fulfillment services cover the entire process of getting an item that’s been ordered online to the customer. Ecommerce fulfillment encompasses everything from receiving the online order to retrieving the goods from their place in the warehouse to boxing and labeling them to shipping and delivering them. Whether your company is business to business (B2B), business to customer (B2C), or direct to customer (D2C), if you’re selling your products online, ecommerce fulfillment is the name of the game.

 

Steps in the ecommerce fulfillment process:

Picking

The first step in fulfilling a customer’s order is to collect the items from their storage locations in the warehouse. This is called picking, and it is carried out by a warehouse operator, or picker. There are two basic ways picking can be done: single order and batch. With the first, orders are taken care of individually, with all items from a given order being picked at once; with the second, a number of one particular item is pulled from its storage location at the same time and then those items are divided into multiple orders. Batch order picking means having to sort items into their individual orders after the initial picking stage. While it requires this second step, if there are a lot of orders to fulfill and many of them have the same item, it’s a cost-saving method. The picking method you choose will depend on the size of your warehouse and the number or orders you have to fulfill.

If you have a large warehouse—and they can be gargantuan nowadays—you also have to make sure that your operators are taking the shortest route as they’re picking. This means listing the items in the right picking order. Thus, if item A is stored close to item B, but item C is way across the facility, it would be logical to list their picking order as A, B, C.

All these considerations are taken care of with a pick list. Created by warehouse managers, a pick list is laid out by item location, name, and quantity needed. Pick lists tell the operator, or picker, first where to go, then what to look for, then how many to pull from storage.

After this, the items are sent to packing.

Packing

Once the items for an order have been collected, they’re placed in a container. It’s important to make sure that the items aren’t damaged during delivery, so packing has to be done with care – and padding.

After the items have been boxed up, a shipping label is created. This label contains:

  • Name and address of the fulfillment company,
  • Name and address of the buyer – where the package is going to,
  • The weight of the package, the entire thing including goods and packing,
  • Unidirectional code, which is a machine-readable code that can be swiped from any direction,
  • A postal barcode,
  • Method of shipping – standard, express, or priority,
  • A routing number, and
  • A tracking number – this is the number customers use to track their package online.

This label is then attached to the package, and the whole thing is weatherproofed with plastic wrap.

Shipping

The package is now ready for shipping. This involves collecting the box and getting it to the buyer’s address. A freight carrier like FedEx or UPS will usually be hired for this, but if the seller is small enough and only has local deliveries, they might take care of it themselves. On the other hand, if a company opts to sell their goods through a major online retailer like Amazon, shipping services are part of the deal: Amazon has its own shipping setup.

Delivery

The final step is to deliver the package to the customer’s door. There, the delivery service may find specific instructions, like being asked to leave the package with a neighbor. Overall, the most important aspect of this last stage is to get the goods delivered on their promised delivery date. Doing this promotes good will – and repeat business.

 

Ecommerce fulfillment models

There are three models you can choose from:

Fulfillment by the seller

When a company is small or doesn’t have many online orders, it can take care of its own fulfillment. If that’s the case, it probably has its own dedicated shipping department, which, depending on the number of online sales it has to organize, might be a small area and not have a dedicated staff. This fulfillment model also works well if the company specializes in unique and valuable items that need extra care.

This system stops working, however, when:

  • The number of orders suddenly shoots up; if this happens, the self-fulfillment system won’t be able to cope and it will collapse.
  • The company doesn’t have a system in place to ensure that all stages of fulfillment run smoothly.
  • The cost of fulfillment is much higher than it would be if using a third-party shipping partner.

2. Fulfillment by a third party

Third-party logistics, or 3PL, stands for an outside company that’s hired to take over all or part of fulfillment.

If a company handles picking and packing in-house and has a large number of packages to deliver to different locations, it’s a good idea to have 3PL take care of those final stages.

Additionally, 3PL companies can provide facilities for warehousing, and they have staff to do the picking and packing tasks as well. The services you choose to use will, of course, determine the fee you pay.

3. Fulfillment by Amazon (FBA)

When it comes to 3PL, the biggest player is undoubtedly Amazon. A complete online marketplace, Amazon is the go-to site for looking to buy something with a click from the comfort of your home, and it is often the first destination for those searching for a particular product. With FBA, Amazon takes care of everything from warehousing to delivery, and it charges two fees: one for storage, and one for the actual fulfillment process.

There are pros and cons to FBA, and the company offers alternatives like Fulfilled by Merchant (FBM) and Seller-fulfilled Prime (SFP). With FBM, the seller lists their products on Amazon’s online marketplace, but takes care of fulfillment itself. SFP is the same, except that Amazon’s shipping policies are used and the Prime badge can be shown against the products on the website. Each of these Amazon services has its own fee structure.

 

How Cin7 can simplify your ecommerce fulfillment

It doesn’t matter which fulfillment model you use, Cin7 inventory management software can be your perfect partner. Its integrated order fulfillment module gives you a clear, overall picture of your entire fulfillment process, including getting goods from your supplier and racking, or warehousing, them. Plus, you can operate your account from a mobile device.

But what if you use a 3PL model for fulfillment services? Well, Cin7 has a solution for you too. The software has 3PL feature that allows you to get real-time information about your inventory anytime, from anywhere, no matter what stage of the operation it’s in. Because it’s cloud based, you can access the system from any device.

 

Wrapping up…

Ecommerce fulfillment service starts when an online order is received by a company, and ends when that ordered item is delivered to the customer. We’ve laid out the steps that are involved in detail and explained the three basic fulfillment methods. While each of these methods is a little different, they all have the same goal: getting your products to your customers in the quickest way possible.

If you’ve been hesitating to set up an ecommerce store because you have concerns about the fulfillment process. keep in mind that Cin7 can provide top-notch services to help oversee and manage your fulfillment, and that it can make the whole process stress-free. Talk to our experts today and book a demo. You’ll be glad you did.

 

Electronic Data Interchange (EDI) what is it and how it can improve the operation of your business

Being able to transmit information from one company to another quickly is an important component of a well-run business. Every day, important files and contracts like purchase orders, invoices, shipping notifications, and catalogs need to be sent. Having Electronic Data Interchange (EDI) software that can interface with different computer networks and digitally get this documentation to someone you’re doing business with is vital.

Stratview Research has predicted that the global EDI software market will grow from USD $1,845.6 million in 2020 to USD $3,244.6 million by 2026, which is a Compound Annual Growth Rate (CAGR) of 9.9%. While most businesses, especially large ones, are already using EDI to send documentation, there may be some smaller companies that haven’t yet made the digital switch. These companies can reap enormous benefits from adopting EDI.

 

What is EDI software?

EDI software allows you to send documentation directly from your computer system to that of another company. EDI puts data from one computer system into a format that allows it to be read by another computer system. Without it, a document a company sends out could not be read by the recipient.

 

What is EDI integration?

When different computer systems can interface because of EDI, they have EDI integration. It’s a seamless, instantaneous way for trading partners to exchange documents like invoices and purchase orders. EDI integration can also be established internally within a company. This means different divisions of a business are able to electronically transfer information between each other and digitally have it at their fingertips. For instance, data kept by the warehouse can be shared with the company’s accounting department.

 

Steps to establish EDI integration

The overall process of producing a business document and getting it to a trading partner electronically is called the workflow. To successfully set up an EDI workflow, you’ll need to do the following:

  1. Make a list of the companies you’ll be exchanging documents with – your trading partners. This will consist of your suppliers, vendors, wholesalers, etc.
  2. Establish what your EDI endpoint will be. Your endpoint for EDI is the segment of your internal computer network system that will be used for the data exchange. This could be your ERP system, accounting software, logistics system, or warehouse management system (WMS).
  3. Decide which business documents you want to send to your trading partner or partners.
  4. Define your EDI standards. EDI standards are a set of globally recognized rules in the digital world for creating documents that have uniformity. It’s a system for producing documents that can be recognized by different computing systems. There are several established EDI standards; ANSI ASC X12 and ODETTE are two of them.
  5. Select an EDI protocol. An EDI protocol is a kind of language that allows computing systems to communicate with each other. In order to exchange documents from one company to another, both have to use the same EDI protocol. There’s a wide range of EDI protocols available, but the four that are most commonly used are: HTTP, OFTP2, AS2, and REST API.

 

How does EDI integration work?

The sheer volume of data businesses produce every day means they have to have a centralized database to store it in. This is an ERP system. EDI software integrates seamlessly with ERP systems.

To transmit data, or documents, using EDI, you have to take the following steps:

  • Prepare the document for the ERP system your company uses.
  • Get the document into an EDI format by using an EDI translator.
  • Convert the EDI document into an agreed-upon EDI standard by using EDI conversion software.
  • Transmit the document through EDI communication protocols like OFTP, AS2 or HTTP.

 

Types of EDI integration

1. Direct EDI integration

Direct EDI Integration or Point-to-Point EDI means that the Internet is being used to facilitate a direct connection between your ERP and your trading partners. Ideal for large-scale organizations that transfer enormous amounts of data on a daily basis, Direct EDI uses a specific protocol.

2. Indirect EDI integration

This involves the exchange of business information between your ERP and your trading partners by using an EDI broker or a Value Added Network (VAN). VAN converts the raw data into EDI data and routes it to the receiver’s endpoint using the EDI communication protocol.

3. Hybrid EDI integration

Hybrid EDI means being able to use both direct and indirect EDI integration. For instance, an organization may use a VAN for indirect EDI transactions when sending some documents, while using direct EDI integration for others.

4. EDI integration as a service

This means using a third-party EDI service provider. There are several reasons why companies would outsource their EDI like this. They may not have the resources to have the software inhouse themselves, or they may choose to focus their time and energy on taking care of the day-to-day operations of their businesses.

 

EDI for small businesses

Fortune Business Insights predicts that globally EDI software will grow to USD $4.04 billion by 2029, which is a CAGR of 11.6%. The main reason for this is that EDI has become more affordable, which means that instead of only being used by large organizations, small and midsize companies are now able to buy it.

Today there’s sophisticated software like Cin7, which has robust EDI capabilities, a large EDI network, and tools that let you manage your EDI customers in one automated system. Cin7 eliminates the need for any third-party EDI software provider.

Cin7’s software is a fast, efficient, full-fledged EDI tool that offers the following:

Workflow automation

  • Automation for any of your business processes,
  • A streamlined integration between many trading partners, and
  • A better EDI operation in general.

Full service

  • Support from Cin7 all the time,
  • Design and configuration services,
  • Compliance testing that meets the standards you expect, and
  • 24/7 monitoring that looks for errors in your system and resolves any issues you may have.

Data transparency

  • The status of your orders can be checked anytime.
  • There won’t be a need to spend money on third-party EDI providers.
  • Your data can be accessed in real time, and all your orders will be fulfilled accurately.
  • All your data transfers will be standardized.

Support for multiple fulfillment models

  • Seamless coordination with your product distributors, 3PL providers, and commerce channels,
  • An intuitive EDI dashboard that makes EDI easy to use, and
  • Multiple options for cartonization, which means being able to fulfill numerous orders instantly.

Pre-built EDI mapping

  • Ability to track the workflow of orders you have with several of the companies you trade with, and
  • EDI software that’s compatible with American National Standards (X12) and European Standards (EDIFACT), so you can trade globally easily.

 

How Cin7 can help you with EDI integration

Cin7’s EDI software can interface with major retailers worldwide. As a cloud-based inventory management system, it takes care of your orders and oversees them from initiation to fulfillment while securely transferring your business documents electronically. You won’t need to employ a third-party vendor for these transactions. Cin7’s software takes care of everything.

When orders are fulfilled quickly and accurately, as they are when you use Cin7’s EDI, customers are happy and more likely to become repeat buyers. Since most established firms prefer EDI for B2B transactions, if you invest in the software, you’ll attract clients who, in turn, can expose you to more business opportunities.

Moreover, automating your business processes frees up your employees to work on other, critical areas of your business. These could include client relationships and expanding your inventory, areas that can significantly grow your business.

So, what are you waiting for? Reach out to our Cin7 team for a demo and learn how Cin7 can help you with EDI solutions.

Retailers prefer inventory management software that they can customize — here’s why

According to Statista, global retail sales totalled approximately $23.74 trillion USD in 2020 and are projected to reach $31.7 trillion USD by 2025. That’s a lot of buying and selling of goods, but more importantly, it represents a lot of inventory, a massive amount of inventory. All that inventory has to be managed, and the best way to do this is by using software that’s designed for the job. If you’re a retailer looking to upgrade your system, you should take a look at Cin7. There are many reasons to consider Cin7, but one of the most important is its flexibility — its ability to be adapted to fit your company’s needs while operating within your digital network.

 

What is retail inventory management?

Inventory management entails determining the quantity of goods or materials a company needs to have on hand to satisfy customer demand. For retail businesses, this is a more complicated process than it is for manufacturing ones. Which is why the software that retailers choose for managing their inventory needs to be able to perform at a high level. In other words, the software has to have the ability to be configured so that it can perform increasingly complex operations. Let’s take a look at the main ways retailers can benefit from inventory management software that has advanced configuration options.

The ability to customize the number of staff who can use the system

Inventory management software usually puts limits on the number of staff who can access the system. This is fine for smaller retailers, but for larger ones that may have multiple outlets, flexibility is key. Cin7 offers a Small Business Plan that gives access to two users, and an Advanced Plan that allows up to eight. But our software can increase that number to whatever your company needs. We call this our Enterprise Plan.

Keeping oversight on stock when using 3PL and being able to handle multiple EDI systems

Third-party logistics (3PL) basically means outsourcing. It’s when a retailer hires another company – a third party – to take care of its fulfillment. The business arrangement may even extend to warehousing. 3PL is especially useful for retailers that sell on multiple online and offline channels. Since manually tracking your inventory on numerous 3PL platforms and outlets is an enormous challenge, it’s important to have software that can do the job. Cin7 has a specific 3PL management feature that helps you administer your inventory stored in any third-party locations from your device. It not only helps you in optimizing your inventory but also speeds up the administrative tasks.

Electronic data interchange (EDI) is the process by which information stored in a computer system is electronically transferred to another computer system. EDI converts the information into a standardized format that can be read by different computer systems.

With the help of EDI, organizations can talk to each other over a standardized set of communication protocols. This helps avoid any inaccuracies that may arise while communicating via non-standardized formats.

Integrated warehouse management

Warehousing is one of the most complicated parts of a retail business. Sometimes a business handles products that need to be stored in different conditions within one space; other times the quantity of goods and size of the business calls for several of these holding areas, which could be in completely different locations. For instance, when a grocery store organizes its warehousing, the food has to be kept at specific temperature and humidity levels. Cin7’s inventory management system can organize all of that. For businesses that have multiple storage locations to oversee, Cin7 can be configured to keep track of the inventory in each one, giving you complete oversight.

Dedicated support and implementation

Cin7’s inventory management system and its Advanced Configuration Plan come with full support. We offer strong customer service to answer any questions you have and resolve any software issues you encounter. This kind of care can be the difference between having your inventory management system run OK and having it run really well.

Customer satisfaction

The main aim of an ecommerce retailer is to provide quality goods on time. If either of these things don’t happen, the business is likely to get a bad reputation and could lose its customers. A reliable inventory management system can prevent this from happening. It will make sure your items are delivered when promised, and it will prevent any out-of-date items from being sent out in the first place. With customer reviews being a mainstay of online sales, having a software system that can organize your business processes to ensure happy customers will not only keep them coming back to you, it will attract new ones.

 

Final note

Cin7’s advanced configuration for its inventory management system can be of great benefit to any business owner, but it is especially helpful for retailers. Its compartmentalized framework of features, which allows you to select only those you need, and the ability to have these features work together and within your computer network, can increase your profits and improve your customer satisfaction.  If you want to know more about Cin7’s Advanced Configuration Plan, call one of our experts today and request a consultation.

Think loyalty programs are just a cheap discounting tactic? Read this.

Fact or Fiction? Loyalty programs use discount tactics, which cheapens your brand. 

If you’re not playing in the discount market (where it’s pretty much a race to the bottom), you might be wary of discounting. Many retailers hesitate to use discount tactics, even sparingly. They worry that it might cheapen their brand and devalue their stock in the long run.

However, if brand perception is what you’re worried about, loyalty marketing can actually provide many of the benefits of discounting without devaluing your product.

What is loyalty marketing?

Loyalty marketing is a marketing strategy that retailers of all sizes use to increase the lifetime value of their customers, by incentivizing and rewarding repeat purchasing.

Loyalty marketing is both:

  1. A simple value exchange for capturing customer data and growing a customer database; and
  2. A targeted rewards system which can be used to incentivize repeat purchasing and recognise the value of individual customer relationships.

Many retailers are wary of old-school discount tactics. The fear is that these tactics will bring in customers looking for the cheapest price—almost by definition, these people are the least likely to establish an ongoing relationship with merchants.

Instead, retailers can use loyalty marketing to offer discounts on a sliding scale: the more customers spend, the more they benefit from the program.

How loyalty marketing drives revenue growth

Here are six ways loyalty marketing helps your bottom line.

Fashion store owner folding clothes for customer at checkout counter. Woman assisting female shopper at fashion shop checkout.

Data-driven marketing improves ROI

The value of a known customer can be measured, an anonymous customer can not. Loyalty programs give you a method of capturing the customer data required to measure and increase the value of each customer.

Regulars spend more per order than infrequent customers

Customers who come back, again and again, love your brand and are willing to spend more. According to research by BIA/Kelsey and Manta, regular customers spend 67% more per order than one-off or infrequent customers.

Loyalty marketing impacts price perception

According to a study by KPMG, 60% of consumers will buy from a store with slightly higher prices if they will earn a loyalty program reward. More than 65% of customers even admitted making special trip to redeem a free gift from a loyalty program.

Customers have a reason to choose you over a competitor

Loyalty marketing influences the consumer decision-making process. Convenience, price and travel time all play a part in the consideration process. But if a customer has points to redeem at your store, that plays in your favour.

Loyalty marketing creates positive customer experiences

75% of consumers would give “rave reviews” to a loyalty program they’re involved in. Loyalty programs help establish a feeling of reciprocity, an important function of any brand-customer relationship. When customers feel valued, they’re more likely to keep coming back.

You will attract more people similar to your best customers

Loyalty marketing helps brands acquire new customers through referrals. Loyal customers generate word-of-mouth and referrals, so you will build an ever-widening network of new customers similar to your regulars (their friends, family or workmates).

Top 3 loyalty marketing tactics

Here are three of the most effective tactics loyalty marketers use to incentivize repeat business, drive up average order size and increase customer lifetime value.

1. Tiered loyalty programs

One of the benefits of loyalty programs is that you retailers can ‘gate’ discounts, only offering rewards to people who spend above a specified threshold.

Tiered loyalty programs take this concept a step further. Tiers reward the highest-value and most frequent customers with the best gifts or discounts. The most widely known application of tiered loyalty is airline points. Airlines offer tiers like “bronze”, “silver” or “gold” status levels to reward customers in different spending brackets. This incentivizes customers to move up through the ranks to earn higher value rewards.

Done right, a tiered loyalty program will offer genuine value to your customers, whether they’re shopping in-store or online.

Federation + sees 10% revenue boost from loyalty marketing alone

Cin7 customer Federation uses Marsello for their tiered loyalty program, Federation +. Their points and reward options incentivize customers to move up through the levels—Silver, Gold, and Platinum.

Since activating the tiered program, Federation have seen their repeat purchase rate jump to 20%. The loyalty program has led to a 10% increase in total revenue.

2. RFM segmentation

RFM stands for recency, frequency and monetary value. RFM segmentation uses all these factors to categorize a customer database into groups. Customers in a brand’s top segment have purchased recently, make regular transactions, and are in the top percentile of lifetime value.

You can use RFM segmentation to group your database, provided you have purchase data attributed to unique customers.

If you have trouble collecting or tracking this data, a loyalty program provides a fantastic incentive for customers to self-identify. A loyalty program will also drive customers into your most engaged segments by incentivizing repeat purchases.

You can also use your loyalty program tier lists or RFM segments to send one-off campaigns. PB Tech sends occasional rewards like free shipping codes to incentivize repeat purchases. You can tailor your promotions to suit the customer group—giving the most exclusive offers to your best customers.

3. Referral programs

Referral programs encourage existing customers to share your brand with their friends in exchange for loyalty points or rewards. That direct referral is highly influential—people are as much as 4x more likely to buy when referred by a friend.

Loyal customers are a powerful marketing asset. Incentivize customers to tell their friends about your store with a referral program to help you acquire more like-minded customers. You’ll tap into the potential of your customers’ networks (their friends, family or work colleagues), connecting you with consumers who are more likely to love your brand!

Key takeaways

Loyalty marketing elevates brand experience

With a bit of planning and effort, a loyalty program augments the customer experience and leaves them feeling valued.

You can collect data with a loyalty program

We know that our regulars are our most valuable customers. But do you know who they are? Could you send them an email? Or an SMS? To actually market to your most valuable customers, you need to know who their customers are, how much they’re spending, and how to reach them. A loyalty program offers an incentive for customers to self-identify at purchase, so you can collect this information.

Customer data will provide marketing insight

If you’re collecting that data—that’s great! Use your top loyalty tiers or RFM segments to offer personalized offers to your highest value customers.

Get started with Cin7 + Marsello

Powered by Cin7 and your e-commerce data, Marsello works seamlessly in-store and online to provide a true omnichannel customer experience.

  • Capture in-store and online customer details
  • Deliver personalized and timely automated marketing
  • Incentivize repeat purchases with email, SMS, a loyalty program, and more
  • Grow your average basket size with advanced product recommendations
  • Accurately track and attribute sales to your marketing activity

Learn more

What is 3PL fulfillment?

Fulfilling customer orders is a significant part of any business. This order-fulfillment process starts when the customer places an order and ends when it’s delivered to the doorstep.

Many companies facilitate fulfillment by using a third-party logistics (3PL) company. 3PL providers can manage the entire supply-chain process from warehousing to fulfillment. In addition to these services, 3PL can also take care of inventory forecasting. Outsourcing through a 3PL is a good solution when a business grows and is no longer able to handle its order-fulfillment processes in-house.

For any 3PL fulfillment company, there are five basic stages of the fulfillment process. The company retrieves items for the order from the warehouse, then picks, packs, ships and delivers them. Let’s better understand the steps involved to get the right product to the right customer at the right time.

 

5 stages of 3PL fulfillment

1. Receiving

Even before an order is placed, inventory has to be stocked in a warehouse. If it isn’t there, or if there isn’t enough of it, orders can’t be fulfilled. When the 3PL receives inventory for its warehouse, it will typically fill out a Warehouse Receiving Order (WRO), a document that lists the names of the items and their quantity.

After this, each item undergoes a quality check and has its barcode scanned. By doing this, the 3PL company can check the accuracy of the WRO and make sure that items are stored in the right bins. This is an essential part of their warehousing.

The process is facilitated by state-of-the-art software, such as Cin7’s warehouse-management software, which takes care of managing the inventory the 3PL holds and its warehouse operations.

2. Picking

When a customer’s order is ready to be filled, the Warehouse Management System (WMS) produces a list of the items, called a picklist, and assigns a warehouse associate to pick each of the items from their respective storage bins. To ensure the associate picks the items in the most efficient way—one that takes the most direct route around the warehouse and entails the least amount of walking—a picking pattern is produced. The software easily generates both the picklists and picking patterns.

When picking has been completed, the items of an order are scanned and set aside for packing.

3. Packing

At the packaging station, a team places the items for an order in a box and pads them with appropriate packing materials such as bubble wrap. Ideally, the 3PL fulfillment provider will choose packing material that is secure, yet lightweight enough to keep shipping expenses low. A seller can also usually ask for special packaging to be used. Once packed, the whole box is sealed tight with tape and a shipping label is attached. This contains all the information necessary to get the goods to the customer. At this stage, the packing department will also make sure that the weight and dimensions they have for the package are correct.

4. Shipping

Before being shipped, packages ready for dispatch are separated into their destination areas. This way, all packages intended for a particular geographical area are put together on the same transportation.

At this stage, the 3PL company can either take care of shipping and delivery for you, or you can arrange for a courier company like UPS or FedEx yourself. If your company is small and you don’t have many packages to deliver, it’s usually a good idea to have your 3PL take care of shipping because they will have negotiated good rates with the carriers. They will also know which shipping method to use to get your goods to your customers in the fastest time possible.

5. Returns

Returns and refunds are a fact of life, especially in online retailing where the customer doesn’t actually see the product they’ve bought until it arrives. For whatever reason a product is returned, there has to be a way for it to be done hassle-free. This ensures customer satisfaction. A good way of streamlining returns is to have your 3PL include a return label with the item they’re shipping.

Your 3PL fulfillment provider should make sure that each item they handle is in perfect order before sending it out. When an item is returned, its condition should be checked again and documented. Based on company policy, an item in good condition will either be placed back in the warehouse or be disposed of.

 

How to have a good 3PL experience

The best way for you to have a good experience from your 3PL is by being able to have oversight. If you have Cin7, you’re able to check on your inventory that’s in their warehouse in real time, know what orders are coming in from which sales channel, and batch track. Batch tracking lets you know things like which group of items a defective one came from and when expiration dates have been reached. Cin7 software will also give you advanced reporting on all aspects of the fulfillment process. Why not book a demo with our experts today?

5 elements of an optimized inventory management system

Retail businesses have an average of 20% inventory to sales ratio. This I/S ratio compares the value of your inventory with the amount you make from selling your goods. The I/S ratio is arrived at by dividing the revenue made from overall sales by the value of the stock that’s kept. So, with a 20% I/S ratio, if you make $100 from selling your items, your stock would be valued at $20. More simply, the I/S ratio here would be five (revenue made from sales divided by value of stock). Maintaining the I/S ratio that’s best for your business is key to maximizing profit. If there’s too much stock, profits are compromised; if there’s too little stock, orders might not be filled. Optimization is the key. What are the best ways to optimize inventory? And, what are the five elements of an optimized inventory management system? Let’s find out.

If you are a businessperson, deciding the amount of inventory you should keep on hand is crucial. If your stock runs out, or if you have too much of it, the consequences could be serious. There could be financial losses and your reputation could be damaged. The only way to avoid this is by having optimum inventory on hand, or the right amount you need. This article will help you to understand what inventory optimization is and explain the five elements of an optimized inventory management system.

 

What is inventory optimization?

Inventory optimization means maintaining an optimum amount of stock, stock being defined as all the stock-keeping units (SKUs) that are being held by a business. When a company has an optimum level of stock, its working capital is being used to its best advantage.

Overstocking inventory can result in

  • Working capital being tied up in unneeded stock.
  • Stock going out of fashion and becoming unsellable.
  • Workers spending time and energy unnecessarily.
  • An elevated risk of loss of goods to theft or accidents.
  • Valuable storage space being used unnecessarily.

On the other hand, understocking and stockouts can result in

  • Turnover being halted.
  • Company reputation being damaged.
  • Production lines being broken.
  • Workers’ time being lost.

Inventory optimization can eliminate these losses. Put another way, when optimal levels of inventory are maintained, resources, like physical space, labor, and capital, can be used in their most efficient ways.

 

5 elements of an optimized inventory management system

As we saw earlier, it is crucial to optimize the amount of inventory you keep at all times. But in order to do this right, what should you be focusing on? Let’s look at the key areas in detail.

Graded policies for inventory management

First, your stock policies should be clearly defined, and you should let the relevant people know about them well in advance. It isn’t helpful if the purchasing department is kept in the dark about these policies.

The inventory turnover ratio indicates the liquidity of the inventory, or the number of times the average inventory is sold during the year. It shows the efficiency and effectiveness of the company in investing its funds.

Inventory turnover time is the number of times a company replenishes its stock in a given period, generally a year. In other words, if you sell stainless steel spoons, the inventory turnover of finished product — spoons — is the number of times you sell out of spoons and replace them. The following formula shows how to calculate the inventory turnover ratio:

Inventory turnover ratio = Cost of goods sold
Average value of inventory

 

where,

Average inventory = Opening inventory + closing inventory
2

Cost of goods sold = Opening inventory + purchase – closing inventory

Now you know how many times a year you have to refill your inventory. The following categories of inventory are dependent on this ratio.

  • Fast moving – Fast-moving inventory is that which is used or sold in a short or easily known period of time. This period is different for every industry. The inventory turnover ratio will be higher for goods in this category.
  • Slow moving – Slow-moving goods are those that stay in your warehouse for a more extended period of time. The inventory turnover ratio for these types of goods will be lower.
  • Non-moving – Non-moving or obsolete goods are those stored in your warehouse for a long time because there is no market for them. This inventory is also known as dead stock.

These three categories should be a major consideration when making purchases. Separate your stock into each one, and invest more in goods that are fast moving than those that are slow-moving.

Realistic demand forecasting

Forecasting demand is, perhaps, the first step when it comes to good inventory management. Forecasting demand accurately is not an easy task, however. There are many aspects that have to be considered: historical sales data, customer biases, future demand, and growth. Additionally, it is crucial to take technological advances and trends into account.

How can you predict demand for your products accurately? Well, quality software can help. Cin7’s system generates reliable demand forecasting reports. Cin 7’s forecasting demand report can make your job a lot easier.

Determining product life cycle

The term product life cycle is defined as the period between the product’s initial production to the time it is no longer sold. If you launch a new product, sooner or later it will stop trending and your customers will move on to something else. There are five stages to a product’s life cycle that impact your inventory management:

  • Introduction – There is less awareness at this stage, so the demand is less, and there is no need to stock a lot of products.
  • Growth – Awareness of the product is on the rise, and the company should be prepared to fill more orders.
  • Maturity – This is when demand reaches a plateau. Demand will still be high, so the company won’t have to make changes to the level of stock it maintains.
  • Decline – Here, the company realizes that demand is dropping. Customers have had enough of the product and are buying less of it. When this point is reached, the company needs to reduce production and focus on replacing it with something new. This is also the time to push more of the product by offering discounts and rewards.
  • Obsolete – Now the product is totally out of demand. Any remaining inventory you have becomes dead stock.

The life cycle of a product can be short (a few months) or long (spread over years). These life cycles have to be taken into account when forecasting demand for your product. Doing this accurately will prevent overstocking or understocking,

Timely restocking

Your purchase department should have clear restocking instructions. Every item in the inventory should have a specific reorder point (ROP), a predetermined level of goods at which they have to be restocked. When determining this reorder point, you should consider:

  • Safety level for stock: This is the minimum amount you will need on hand to tide you over until your new order arrives. You don’t want to run out of stock.
  • Logistics: You have to consider the time it takes to get your goods to your factory or warehouse.
  • External factors: These include weather, political upheavals, and labor issues. Any one of them can affect your delivery time.
  • Supplier lead time: This is the time it takes your supplier to dispatch your products. Suppliers have different lead times.

Management needs to be aware of ROP to ensure stock is replaced in a timely manner. Inventory management software like Cin7 can send alerts that let you know when you reach this ROP.

Investing in reliable inventory management software

If you find inventory management challenging and are intimidated by the sheer number of calculations that have to be made, here’s an easy solution: Cin7. This versatile and easy-to-use software can help you manage your inventory easily. Among the features it has to make your life easier are

  • Determining reorder levels,
  • Alerting you when you reach ROP,
  • Sorting third-party logistics (3PL),
  • Helping you with B2B ecommerce,
  • Generating reports on COGS, forecasting, cashflows, and inventory on hand, and
  • Integrating with other software and mobile OS.

The following video shows how Cin7 inventory management software can help you take your business to the next level:

One of the significant advantages of Cin7 is its inventory management app. This app lets you connect to your inventory management program from anywhere.

 

Final take on inventory optimization

While inventory optimization is a crucial element of a successful business, it is also painstakingly tricky and complex. Overstocking can lead to losses, while understocking can damage your reputation. How can you overcome these dilemmas? Cin7 inventory management software turns the whole ordeal into a piece of cake.

Why wait? Contact our experts for a demo, and unlock the true potential of your inventory.

12 reasons why using the Cin7 inventory management system for your Amazon business is beneficial

Amazon.com is undoubtedly the number one name in ecommerce. It has dwarfed every other ecommerce platform. Thus, if you are thinking about becoming —or already are — an Amazon seller, you are on the right path to increasing your turnover. How can we help take you further? Here are 12 reasons why using the Cin7 inventory management system for your Amazon business is beneficial.

 

Reason 1: Centralized inventory management

How would you feel if you bought something on Amazon and received an email two days later telling you that your item was out of stock? Not good, right? You probably wouldn’t order from that supplier ever again.

If you are a supplier, you wouldn’t want any of your customers to go through that experience.

As a supplier, you might be selling on multiple channels. Without a centralized inventory management system, you might find yourself selling a particular product on more than one of these channels simultaneously, possibly overselling and leaving you unable to fulfill orders. The damage to your reputation as a business that a miscalculation like this can cause cannot be overstated, but it is something that can be easily avoided.

Cin7’s inventory management software allows you to maintain multiple points of sale – either physical or online – on a single system. It updates your inventory in real time on all platforms. This real-time inventory accounts for sales, purchases, transfers, and loss of goods.

 

Reason 2: Higher visibility

When you have an integrated inventory management system, you have a holistic view of your inventory, a complete overview that clearly shows you what’s been purchased, sold, and is on hand. It also lets you know the exact point at which you need to reorder stock.

An added benefit of Cin7 software is that it gives you up-to-date sales figures for each platform you use. When it comes to Amazon, Cin7’s software has an integration tool that tells you exactly how much you’re selling on that marketplace and when a sale has taken place. This information – found on your Cin7 reports – lets you know when to increase or decrease your inventory. The result: profit maximization for your company.

 

Reason 3: Cost control

If you use Amazon Central, you can add or delete your listings on its Excel sheet online. However, those changes only apply to Amazon.com. They won’t have any effect on other selling platforms you use. To do that, you’ll have to make changes to each platform you use individually.

If you use Cin7’s inventory management system, however, you can add or delete an item with just one click. The software lets you make alterations to your stock on all the platforms you use simultaneously. Being able to do this not only reduces administrative efforts, it can drastically lower your cost.

 

Reason 4: Product identification

Barcodes and radio frequency identification (RFID) tags uniquely identify every product in the inventory. This type of identification provides product details, including size, color, material, and warehousing information. These barcodes and RFID tags help keep track of your product as it moves through the system, meaning that you’ll know where an item is at all times. It also means you’ll be made aware if something is lost or stolen.

 

Reason 5: Reports and forecasting

Inventory management systems have a specific feature called reports and forecasting. The Cin7 software has higher accuracy in forecasting than others. The way it works is that the system tracks the historical data entered and uses it to make predictions about future needs for your business.

These forecasts apply to inventory needs and sales predictions on every platform. Reports of this kind help you make better business decisions, decisions that will lead to greater success.

Suppose you only sell on Amazon and use Amazon Central to manage your inventory. While that’s OK on one level, Amazon’s system won’t let you analyze your stock as easily as you could with a general inventory management system. The deeper knowledge a general inventory management system can give, like forecasting and detailed reporting, allows you to make informed decisions that could help grow your business.

 

Reason 6: Assisted decision making

Strategic decision making is probably one of the most complex, and important, parts of running a business. The key issue is to place orders in such a way that your products are neither overstocked nor understocked. Cin7’s inventory management system can help with these decisions by:

  • Calculating reorder points (ROP) for each of your products.
  • Giving alerts when the stock reaches ROP.
  • Programming automatic reorder emails that are sent to suppliers when the stock reaches the ROP.
  • Tracking price changes.
  • Tracking the inventory on each selling channel.

The inventory management system can ensure you don’t run out of stock on any platform, including Amazon. It can also reduce the time involved in making decisions about reordering.

 

Reason 7: Integrations

A first-rate inventory management system allows integrations with third-party software and apps. If your inventory management system doesn’t work with other apps you use in your daily routine, you will find yourself in trouble. Cin7 integrates with over 700 apps.

 

Reason 8: Payment portal

Cin7’s inventory management systems has an integrated payment portal that can receive online payments. This helps you maintain account receivables, handle orders through the supply chain, and email invoices to customers. Automating the payment portal speeds up the payment process and fulfillment of the order. The system also lets you email payment links to customers. This not only provides an easy-payment method for customers, it gives them an instant confirmation of their order, assuring them that they can trust you.

 

Reason 9: Customer satisfaction

Customers who don’t have issues to face when they make a purchase, like problems with delivery and payment, tend to develop trust in you as a seller and are more likely to return for their next purchase. Cin7’s inventory management system takes care of all these aspects of your business, which promotes maximum customer satisfaction. This frees you up to concentrate on improving the quality of your products.

Satisfied customers don’t just give you repeat orders, they are also more likely to give you positive feedback online, helping to attract new customers. Increasing your overall customer base this way will lead to higher turnover. Online reviews, in fact, are very important to online marketplaces. With Amazon, for instance, it’s been observed that 90% of customers typically read reviews before visiting a business or making product decisions.

 

Reason 10: Calculation of Amazon commission

Amazon lets you sell your products on their platform for a commission. When customers make a purchase from the Amazon website, the full amount they pay goes to the online marketplace. Before Amazon passes that money on to the seller, they deduct their commission. The calculations for these sales and commissions are straightforward if you only sell a couple of products. But they become more complicated the more your business grows. Cin7’s inventory management software reduces your calculation woes. It will help you track your sales and keep on top of commissions Amazon has deducted.

 

Reason 11: Fulfillment by Amazon (FBA)

Amazon has warehouses that can store and ship your products to your customers for an extra charge. The system is called Fulfillment by Amazon or FBA. If you choose to sell your products through FBA, Cin7’s inventory management system will let you track:

  • FBA shipping plans,
  • Route orders for dispatch from the stock location closest to the customer, and
  • Direct Fulfillment (for Amazon Vendor).

The processes for selling, shipping, and payments can be made easier when you use a reputable inventory management system for Amazon sales.

 

Reason 12: Built-in electronic data interchange (EDI)

Electronic data interchange (EDI) is the electronic exchange of information between two or more companies in a standardized format. An Amazon seller is a person who sells goods they manufacture. An Amazon vendor is a business who resells or trades goods manufactured by somebody else. The customer is fully aware if they’re buying from a manufacturer, the seller, or a vendor.

If you’re a manufacturer and you have multiple vendors, it can be difficult to manage their accounts and keep track of the stock they have. Cin7 Amazon integration helps you by managing the EDI with your vendors easily. It allows you to do the following:

  • Product mapping,
  • Order downloads,
  • Order status updates,
  • Stock adjustments,
  • Stock availability, and
  • Bill of materials (BOMs) for product bundles.

Thus, whether you’re a manufacturer with multiple vendors or are a vendor with multiple suppliers, Cin7’s inventory management software makes it easier to run your business.

 

Final thoughts on 12 reasons why using the Cin7 inventory management system for your Amazon business is beneficial

A reliable inventory management system should reduce administrative expenses and clerical tasks. If you sell on multiple channels, being able to organize your inventory to make sure you aren’t overstocked or understocked is crucial.

Amazon is one of the biggest ecommerce platforms, and listing your products with them can widen your market. Using a Cin7’s inventory management system is a good way of managing your online and offline points of sales. It helps you stay on top of every stage of your selling business, from buying your inventory to fulfilling your orders.

Contact us today for a demo of the Cin7 software.

Merrell NZ: How to build a highly engaged customer base

This is a guest blog post written by Cin7 partner, Marsello. Learn more about our partner program.

Email marketing is a key sales tactic for retailers and product sellers, so it’s important to have an active, responsive database. That means consistent or growing engagement (open and click rates), a high repeat purchase rate, and growing average customer lifetime value.

In this article, we’ll look at how Cin7 and Marsello customer Merrell NZ builds their customer database, which boasts a 15% repeat purchase rate and an average purchase frequency of 3.5x.

Did you know? 50% of consumers buy from marketing emails at least once per month, and 59% say that marketing emails influence their purchase decisions (Salecycle, 2022).

How to build a highly engaged customer base

1. Collect high quality contacts

Merrell NZ use a clever tactic to ensure the best quality contacts are added to their database: They ask for more than just an email address.

This might seem contradictory — surely the more information you ask for, the fewer leads you get? But Merrell NZ know that their most valuable customers are those who are willing to give just a bit more information.

This pop-up has a 25% sign-up rate. That’s incredible.

Here’s why the pop-up works:

  • It gets to the point in the first two sentences.
  • It’s aligned with Merrell’s beautiful, down-to-earth brand.
  • It offers VIP rewards in return for contact information (and everyone knows giving your date of birth means birthday goodies!)

For a business that understands how valuable its database is, this tactic is perfect.

Top 3 Pop-Up Mistakes:

  • No offer, promise of value, or incentive
  • No obvious purpose (too wordy, or an unclear offer)
  • Poor user experience (for example, it’s hard to get the pop-up to close)

2. Leverage email automation

Merrell NZ is building even stronger relationships with their customers with automations. Triggered when customers take a specific action or meet certain criteria, automated emails help Merrell NZ deliver a highly personalized customer experience.

Marsello “gives us the opportunity to link customers from our retail and web stores, work around customer retention and automate email marketing flows in a really clever way,” says José Matiz, Retail Manager for Merrell NZ.

“For us, Marsello was a game-changer, we have been using it for over a year. We started with email marketing and now moved on to loyalty programs and several automations, it’s amazing,” says José.

Above: Merrell NZ’s abandoned cart automation, set up in Marsello.

Automated emails, triggered by a customer action, get 8 times more opens than manual, bulk emails. Here are two very effective automations you can set up in just a few clicks:

  • Welcome emails: More than 80% of consumers will open a welcome email, and these automated welcome emails see up to 10 times more clicks than other manual emails. You can deliver immediate value with a thank you discount or voucher to make a great first impression, introduce them to your brand, and encourage them to buy again.
  • Abandoned cart emails: Send a friendly reminder to customers if they abandon their cart. This reminds your customers to come back to your store and complete their purchase. On average, each abandoned cart email generates $5.64. In comparison, the average promotional email generates $0.02.

3. Use segmentation

Customer segmentation is the process of dividing customers into groups, allowing retailers to do more targeted and effective marketing.

Segmentation is a powerful antidote to poor database engagement and low email open rates. According to research by Hubspot, 78% of marketers reported that segmenting their database is their most effective email marketing strategy. In an analysis of more than 100,000 emails, Hubspot found that segmented email lists had 12% higher click-through rates than emails sent to an entire database.

You can segment your database in any number of ways, allowing you to discover and create different cross-sections and niche subgroups within your database:

  • Demographics: Segment by common customer characteristics such as age, gender, or life stage.
  • Geography: Segment customers based on country, state, or city.
  • Behavior: Segment customers based on their activity at your stores such as last purchase data, repeat purchase rate, or the number of loyalty points earned.
  • RFM: Segment by Marsello’s RFM groups based on purchase recency, frequency, and spend. (most valuable customers, at-risk customers, window shoppers, and more).
  • Or any combination of the above.

 

Merrell NZ: Creating segments of your best customers

Merrell NZ’s average repeat purchase rate across the database is 15%, but some groups of their customers purchase more frequently than others. Merrell NZ uses loyalty program tiers to create segments of their most engaged customers for VIP marketing.

Above: Segment your marketing lists with Cin7 + Marsello.

Sending targeted marketing to your best customers, like this, is smart. Roughly 80% of a business’s profits will come from 20% of its customers—that is, your regulars. These customers are brand-aware, highly likely to engage with your emails, and are very unlikely to unsubscribe.

Retailers can also send more frequent messages to those who are loyal brand followers (although you’ll see your best engagement if you don’t send more than five emails per week).

Some customer database tips

  1. Email marketing is all about quality, not quantity. Sending targeted, considered emails to smaller groups will often outperform bulk emails to your entire database.
  2. Database hygiene will help engagement and reduce costs. From time to time, remove contacts from your lists if they haven’t responded to win-back campaigns, or haven’t opened emails in a long time.
  3. Get more granular, detailed customer data for better segmentation. Connect your online and in-store sales channels to your marketing platform for the best results.

Cin7 + Marsello

Powered by Cin7 and your e-commerce data, Marsello works seamlessly in-store and online to provide a true omnichannel customer experience.

  • Capture in-store and online customer details
  • Deliver personalized and timely automated marketing
  • Incentivize repeat purchases with email, SMS, a loyalty program, and more
  • Grow your average basket size with advanced product recommendations
  • Accurately track and attribute sales to your marketing activity

Book a demo with Marsello