One of the most challenging parts of running an eCommerce shop is maintaining the right inventory balance.
Too much inventory and you’ve got money tied up that you may never get back out, too little and you risk upsetting potential customers with long wait times for back orders. That sweet spot in between is where your company really shines.
So, how do you improve your eCommerce inventory planning? Simple. Try these four tips!
#1. Take Advantage of Software. There’s so much good software out there today to help you predict sales based on past sales data, as well as help you see the bigger picture of what’s selling and what isn’t that it’s almost unthinkable to still be doing inventory by hand!
Investing in inventory management software and bar code scanning equipment can greatly improve your ability to predict trends and monitor your inventory accurately.
#2. Determine Critical Metrics. There are certain characteristics that your really good products all share, just like there are certain characteristics the ones that cost you big time have in common. Using your data to determine what these are can help you do more to root out stock that will ultimately be a loser for your books and bring in more stock that will be hot commodities.
After all, the goal is to make a profit, not to keep products around that are just dead weight.
#3. Leverage JIT Inventory Management. Just-in-time Inventory Management can help you minimize your warehouse storage by only moving products into your facility when they’re ordered by a customer.
There’s less waste involved and more efficiency in many ways, but it can also slow down shipping times, since you have to wait to get the item before you can repackage and send it out again.
#4. Choose a Data-Centric 3rd Party Logistics Partner. If you feel ill-prepared or simply don’t have the manpower to collect the data necessary to really maximize your inventory planning, another option is to partner with a data-centric 3PL.
They already have the equipment in place to collect all the necessary data and often can integrate your shopping cart directly into their software, making it an easy transition.
Planning your eCommerce inventory just right is crucial to keeping your company healthy in the long run, but it’s also important to have a plan for excess inventory. Inventory management is a constant exercise in balance, but software tools and 3PL experts can help you get it right every time.