Inventory Management – What to Consider
With the growth of technology and the Internet, ecommerce has exploded onto the scene. People now have access to an industry that was otherwise limited, however, with it brings a unique set of issues. If you go on the Internet, you will see a variety of different advertisements that show how ‘easy’ it is to start an online business. What they fail to mention are the difficulties of inventory management, should you decide to purchase a certain quantity of product. This article will go over a couple items to consider, and then what software you can integrate to assist in this business metric.
When running an online business, it is imperative to understand what products are selling and which ones are selling slowly. The reason is you do not want capital tied up in product sitting on a shelf, when that money could be allocated to something more effective.
To do this, you will need to analyze the data on your ecommerce store and understand either the cyclicality of your customers or simply the general flow of orders. This brings the importance of tracking orders to another level, as it can be a valuable data point to your company’s cash flow.
To piggyback off of stocking product, the importance of tracking your selling data is crucial. When you are first starting out, the ability to track information manually may seem the most efficient. While this may be true at the start, as your business begins to grow it can limit your ability to scale. Certainly you can continue to grow, but your old method of manually tracking sales and inventory will quickly become obsolete. To avoid this, it may benefit you to implement an inventory software product from the start.
The goal with implementing inventory management software is to track inventories, sales, and deliveries of your product. As previously stated, you can complete this manually at the beginning of your business, but odds are it will become ineffective later in your businesses life.
When implementing the software, the first goal is to eliminate the overstocking of products. This software will be able to indicate which products are selling and which ones are sitting longer. From there, you can adjust your purchases and selling price accordingly. If your ecommerce business is large enough, it can even reorder product for you, eliminating the need to manually refill supplies.
From a growth aspect, implementing this software will allow your ecommerce business to scale appropriately. The Internet moves at incredible speeds and your customers want their products as quickly as possible. Inventory management software will allow you to adapt and continue to be competitive, without needing to slow down and adjust if you were doing this manually.
Ecommerce continues to grow in popularity, but ensuring you have the correct software in place will save you money. Your money will be saved relating to less overstocking and not hindering your ecommerce’s ability to grow. Inventory management software will become one of the largest assets to your organization, allowing you to allocate time and money to more important aspects of your ecommerce business.