The growth of e-commerce businesses has really taken off in recent years. As customers search for a more efficient way to purchase goods, online sellers have had to adapt to keep up with demand. Part of keeping up with the demand of an online store is inventory planning. Without a good inventory system in place, you could be losing thousands of dollars in profit a year! Here are some important inventory planning tips for online sellers.
Inventory Planning & Control
The purpose of inventory planning is to help online sellers determine the optimal quantity and timing for their stock to align with sales and production capacity. For an online seller to do well, they need two things:
1) A fully function front end website to facilitate sales.
2) An inventory system in place, that allows for efficient order fulfillment.
When a customer places an order online they are usually looking for a good deal. They want cheap or free shipping, and they don’t want to wait. Which means that order fulfillment needs to happen right away in order to keep up with demand. Inventory planning helps streamline this process, by allowing sellers to keep track of their inventory. This is particularly important if inventory is kept in more than one warehouse.
Inventory Planning & Control Strategy
When it comes to inventory planning there are a couple of things that need to be considered. For starters you need to set minimum viable stock numbers. This refers to the minimum amount of stock you keep on hand to meet customer demands.You want to avoid overstocking, where you tie up too much capital in unsold product. As well as avoid under-stocking where you miss sale opportunities. You need to have a strategy to move products that aren’t selling. You also need to know which channels you are going to use to sell your products.
In addition, forecasting is extremely important to inventory planning because it helps determine the amount of stock you keep on hand. Forecasting involves looking at past sales data and projecting what future sales are going to be. This help sellers determine the amount of inventory they need. In order for success, forecasting needs to be accurate. Like mentioned above, online sellers want to avoid overstocking and under-stocking, as both can have a direct effect on profit margins.
Maintaining accurate inventory levels is also important. Which is why it is important to routinely conduct a physical audit of your inventory. Things happen, and sometime inventory numbers aren’t accurate. The only way to know for sure is to physically take inventory at regular intervals. Missing stock could result in back-ordered items and cancelled sales.
Inventory Planning & Control Tools & Resources
E-commerce platforms like Shopify, have automated inventory systems in place. This helps sellers categorize their merchandise, maintain stock numbers, and also provides insight into how their merchandise performs. This helps them ascertain which products sell the best and which products don’t sell. This allows online sellers to keep products that their customers like in stock, and also avoid wasting money on inventory that doesn’t sell.
There are also many software programs designed specifically for e-commerce stores. This helps centralize your inventory management, which can be particularly challenging if you sell on multiples channels. Automated inventory management software like ChannelApe, Ordoro, or Delivrd can automatically update your website and other sales channels you use with new products, keep track of inventory levels, order fulfillment, They also merge well with dropshipping sellers.
Inventory Management Software Review
ChannelApe – ChannelApe allows online sellers to streamline their entire selling process. It automatically updates inventory, and automates order processing and fulfillment. ChannelApe integrates well with Amazon, Ebay, and Shopify. We like ChannelApe because it synces effortlessly with multiple sales channels. Their pay as you go pricing model is also very reasonable.
Ordoro – Ordoro is a cloud-based shipping tool that allows users to manage all aspects of the sales process. It works well with dropshipping and automates shipping requests and barcode scanning. It can also provide revenue data. It integrates well with all of the major selling channels, including Amazon, Ebay, Etsy, and Shopify, with a web app specifically for Shopify users. We like if functionality and its affordable price point starting at $25 – per month.
Delivrd – Delivrd is a free cloud-based app that helps users manage their products with order fulfillment, barcode assignment, and profit analysis. It is also great because it can consolidate unfulfilled orders for more efficiency. It works well with Ebay or Shopify. We like Delivrd because it works well for businesses of all sizes, and the base membership is free, so you can try it out with no obligation.
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