Inventory Management Best Practices for E-commerce Businesses

Inventory-Management-Best-Practices-for-E-commerce-Businesses

Managing inventory is arguably the most important part of conducting a company online. It can be fairly easy to reduce your risk while maximising your return in the proper circumstances. 

You just need to find the right partner with the help of the right technologies. It costs money to manage your inventory, so you want to be sure that your spending is wise.

Additionally, you don’t want to run out of a product on which your clients have come to rely. That would not be good for your company.

Key to Effective and Efficient Inventory Management

  1. Develop an Inventory Management Plan

Inventory-Management-Best-Practices-for-E-commerce-Businesses-Develop-an-Inventory-Management-Plan

For every firm, inventory is normally a calculated risk; but, in e-commerce, this risk is heightened.  The nature of e-commerce in your inventory is available to all customers, making it considerably more valuable.

Because of this, you cannot afford to be careless in this area. To make sure that you are correctly managing your inventory, you must have a plan in place.

The following stage is to plan the various distribution channels you’ll use to market your products.

  • This could entail making a schedule for purchases, 
  • coming up with a shopping list, 
  • or exploring the possibility of drop-shipping.

2. Make Safety Inventory Management Culture a Priority

Inventory-Management-Best-Practices-for-E-commerce-Businesses-Make-Safety-Culture-A-Priority

We already know that safety comes first during a pandemic. You must safeguard your clients and staff from the risks of receiving the virus because they are susceptible to being ill.

Keeping your inventory secure and away from any suspicious things is one method to achieve this.

Many companies have introduced safety measures during the pandemic, including setting up a dedicated email address for clients to use in case they order suspect things.

These safety precautions not only help you prevent any suspicious transactions but also assist you to keep both your customers and personnel safe.

The advantages of having a secure and open inventory must be weighed against the drawbacks of keeping products that you believe can draw unwanted attention from law enforcement or other agencies.

3. Consider Inventory Management Legal Considerations

Inventory-Management-Best-Practices-for-E-commerce-Businesses-Consider-Legal-Considerations

When inventory is not accurately accounted for, it becomes a legal problem. This could happen when products vanish mysteriously or when products are harmed or destroyed carelessly.

The company owner can get into a little trouble if this occurs. Accountants take the legal aspect very seriously; they will carefully review every line of your records for indications of fraud.

To prevent any issues, it is crucial that you are aware of these legal repercussions and that you take the required steps.

4. Recognise Your Position In Inventory Management  As A Product Owner

Inventory-Management-Best-Practices-for-E-commerce-Businesses-Recognise-Your-Position-to-As-A-Product-Owner

You have to realise that the entire inventory process includes you.

It does not follow that you will instantly receive the items just because a customer orders something you sell via an online business.

Orders are typically processed by outside parties, including fulfillment firms, who will then pack and send your order in accordance with your instructions.

Given that they will be doing all the labor-intensive lifting on your behalf, this package delivery firm might end up being your new best buddy.

You must make sure that your interactions with this business are professional and that they take great care to pack and transport your product as soon as feasible.

ALSO READ  How To Get Started With Conversion Rate Optimization (CRO)

You must do your research if you are an owner of an e-commerce business and want to create and keep strong working relationships with important vendors.

This entails mastering order management techniques and getting to know your salespeople. This will assist you in building trust, which will enhance your company’s entire relationship with its customers.

5. Pay Attention to What You Can Control in Inventory Management

Inventory-Management-Best-Practices-for-E-commerce-Businesses-Pay-Attention-to-What-You-Can-Control

Knowing when to say no to requests that are outside of your control is a key component of being a successful business owner.

We all experience times in life when we are so preoccupied with pressing matters that we neglect the essentials. One of the worst errors that companies commit frequently is focusing too much on outside factors and ignoring those that they can control.

The same applies to inventory management. You would prefer to have total control over every area of your business in an ideal world, but that is not always achievable.

You shouldn’t waste time and energy trying to influence external elements like the economy.  The weather or even a strike by your preferred manufacturer when it comes to inventory management.

Instead, it’s crucial that you concentrate on the things you can influence, try to spot the trends and patterns that are having an impact on your company, and modify your strategy and course of action as necessary.

6. Make the Most of Your Employees’ Potential for Inventory Management

Inventory-Management-Best-Practices-for-E-commerce-Businesses-Make-the-Most-of-Your-Employees-Potential

Utilising your staff to the fullest extent is one of the finest strategies to manage your inventory. If you don’t have the staff, you can’t manage your inventory well.

Your team will get more knowledgeable about what is required and how to maintain track of the inventory as you use them more frequently.

The management of inventory cannot be left to just one or two persons. A complete department or team should be in charge of managing the inventory and shipping it to customers instead.

Make sure the person you have chosen for the job is qualified to do it and has received the appropriate instruction.

Find strategies to maximise the physical and mental capacities of your current personnel while maximising the usage of their physical labour.

For instance, if you have an employee in charge of inventory control who is also tasked with receiving and storing incoming goods, they can also take on the extra duties of billing and shipping.

You can improve collaboration while boosting the effectiveness of your entire operation by tearing down the barriers that exist between staff members.

7. Keep Your Regular Inventory Management Schedule

You may depend on some predictable patterns that emerge over time when you have a routine, and you are assured that you won’t be caught off guard.

Routines can help you stay on task and guarantee that you are as productive as you possibly can.

Establishing and constantly updating a routine for your inventory may assist ensure that you are always maximising your potential, just like in many other areas of your business.

ALSO READ  7 Ways Promotional Products Boost Digital Marketing Efforts

You must first choose how you will monitor and keep track of your inventory levels in order to correctly build and maintain a routine for your inventory.

There are several ways to accomplish this, but in the end, it all depends on how carefully you plan to keep track of the things you own.

Utilising an inventory management app for a mobile device is among the easiest and most efficient ways to accomplish this.

With the help of apps like Numi, you can use the smartphone’s camera to scan your things, essentially eliminating the need to manually record your inventory and guarantee that it is always up to date.

Most organisations today utilise a computerised inventory management system to keep track of the products they have on hand.

These techniques can assist you in determining whether any items are noticeably out of stock so that you can inform the store where you bought them of the problem.

These systems may also enable you to keep track of when merchandise is likely to sell out due to high demand so that you can get ready to rapidly replace your stock.

Accessing your sales and purchases from any device, anywhere, at any time is one of the key benefits of employing digital inventory management systems.

When using an online system, you can also set up automated replenishment orders that will be sent to you when your store runs out of a specific item.

How to Make Inventory Management Effective?

You must get organised and develop a clear understanding of the situation in order to manage your inventories successfully.

Making a list of every item in your store should be your first step. Both items that are in stock and those that are on the “buy now” or “hire now” list should be considered.

You will be able to quickly identify what supplies are running low on your shelves once you have this list.

This list can help you decide whether or not you need to get more of a certain item; at the absolute least, it will let you know which goods are running low so that you can find them and swiftly reorder them.

Knowing what is running low will help you anticipate future demand and make sure you have the supplies you need when you need them.

get google ranking ad

Throughout the year, it’s crucial to maintain track of your inventory. This will prevent you from overwriting earlier entries and help you develop excellent habits. It will be OK to use a straightforward tracking method, such as a spreadsheet or notebook.

Inventory Management Order Control

You can address the order management issue once you have a clear image of your inventory. Make a buying schedule first, taking into account all the products you’ll require throughout the course of the year.

Better organise the schedule when you purchase. Planning the various distribution channels you’ll employ to advertise your products comes next. 

Some businesses are really inventive when it comes to their ordering processes.

Instead of using more conventional buy orders to manage inventory and order fulfillment, they try to develop their own internal workflows.

ALSO READ  Key Account Management: The Ultimate Guide

For instance, if a product is out of stock at one of their warehouses, Amazon will place a buy order. After a product is ordered and put into the shopping cart, a purchase order is sent to the supplier. 

It is considerably easier if you take the time to manage orders effectively. To do this, careful planning and attention to detail are required.

Additionally, make careful to look for any signs of malfunction or error on the website of any fulfillment firm you use to execute your transactions.

Make sure your clients’ privacy and security are always appropriately protected. If you work with several vendors, be sure to have written agreements with each of them to ensure that all of your legal and financial responsibilities are met. 

Pay Particular Attention to Inventory Management Details

It is considerably easier if you take the time to manage orders effectively. This necessitates rigorous planning and attention to detail.

After receiving an order, you typically check off each item the customer wants as soon as possible. Once you’re done, you may send them an email letting them know that their order has been received and will be shipped out as soon as possible.

Always provide the tracking number so that the customer can monitor the status of their package. By doing this simple action, you can prevent unpleasant surprises after the shipment arrives.

Taking Advantage of Technology  for Inventory Management

If you store your inventory in a warehouse and have access to the internet, you can utilise technology to monitor inventory levels and ship orders more rapidly.

You can use technology to alert the appropriate parties when your storage units are almost full so they can clear out space for more items to be stored.

It also reduces the time you and your workers must spend hunting for storage space, which helps your financial situation.

By organising your store according to the above-mentioned best practises for inventory management, you may make it run smoothly.

Remember that inventory management is not a precise science, so you’ll need to experiment with various fluid management techniques to achieve the greatest results. 

To increase the profitability of your store, just make sure you’re continuously using the aforementioned advice.

To make sure that all of your legal and financial obligations are met while working with many vendors, secure written agreements. Additionally, this will help you avoid problems in the future.

Key Takeaway

Managing inventory is arguably the most important part of conducting a company online. It can be quite easy to reduce your risk while maximising your return on investment in the proper circumstances. 

However, if careful preparation and measurement are not taken, it may be simple to fall into the wrong hands and sustain a great deal of loss.

Adhering to the right guidelines, as described in this article, is the key to effective and efficient inventory management.

You may significantly reduce your risk of losing a sale due to insufficient inventory and increase your chance of running a profitable business by consistently reviewing your stock, concentrating on what you can control, and establishing a regular routine.

 

About the Author

Tom Koh

Tom is the CEO and Principal Consultant of MediaOne, a leading digital marketing agency. He has consulted for MNCs like Canon, Maybank, Capitaland, SingTel, ST Engineering, WWF, Cambridge University, as well as Government organisations like Enterprise Singapore, Ministry of Law, National Galleries, NTUC, e2i, SingHealth. His articles are published and referenced in CNA, Straits Times, MoneyFM, Financial Times, Yahoo! Finance, Hubspot, Zendesk, CIO Advisor.

Share:

Search Engine Optimisation (SEO)

Baidu SEO: Optimising Your Website for Chinese Audiences

In today’s interconnected world, expanding your online presence to capture international markets has become essential. When targeting the Chinese market, …

Enterprise SEO: Everything You Need to Know

Are you looking to enhance your online presence and boost organic traffic to your website? If you’re operating on a …

10 Tested SEO-optimised Content Development Techniques

Content development refers to creating or improving material that conveys information to a particular audience. In addition to textual material …

7 Emerging Skills Every SEO Must Master in 2023

7 Emerging Skills Every SEO Must Master in 2023 One thing almost all SEOs can agree on is that SEO …

How to Use Keyword Intent to Maximize Conversion Rate

After keyword research, you’re armed with a list of potential keywords to target.  Let’s say one of the keywords is …

Search Engine Marketing (SEM)

Leveraging Social Media for Search Engine Marketing (SEM)

You’ve probably heard of social media, and how important it is to businesses and marketers. Chances are, you use one …

PSG Grants: The Complete Guide

How do you kickstart your technology journey with limited resources? The Productivity Solution Grant (PSG) is a great place to …

Is SEO Better Or SEM Better?

I think we can all agree that Google SEO is pretty cool! A lot of people get to enjoy high …

How To Remove A Web Page Without Affecting Overall SEO

Before removing an old page from your website, do you ever stop to think about the potential effect it might …

Toxic Links Threats and Disavows: Complete SEO guide

Your website is only as strong as the backlinks you have. We’re not talking numbers here but quality.  If you …

Social Media

25 of the Top Social Media Agencies in Singapore (in 2023)

Singapore is a hub of creativity and ingenuity, so it should come as no surprise that it’s also home to …

How to Find Influencers to Promote Your Small Business in Singapore (Low Cost)

In today’s digital age, social media influencers have become powerful tools for businesses looking to increase their brand awareness and …

Instagramming Your Way to Success: Tips for Effective Social Media Marketing in the Travel Industry

Social Media has revolutionised how businesses connect with their audience. In the travel industry, where experiences and visuals play a …

The Rise of Influencer Marketing: Leveraging Social Media to Promote Your Travel Planning Agency

Social media has become an integral part of our daily lives. People from all walks of life use social media …

App Marketing on a Budget: Cost-Effective Strategies for Maximum Impact

In today’s digital landscape, app marketing plays a crucial role in driving the success of your mobile application. However, many …

Technology

The Rise of Influencer Marketing: Leveraging Social Media to Promote Your Travel Planning Agency

Social media has become an integral part of our daily lives. People from all walks of life use social media …

8 Strategies for Bug Hunting: Debugging, Testing, and Code Review

Bugs are among the most unpleasant aspects of the software development process, whether you’ve worked on a little side project …

How Does A Virtual Private Network Work

If you’re reading this, I assume you’re either a small business owner who’s looking to expand your reach, or an …

Digital Identity Theft: How to Protect Yourself from Scams and Fraud

We are always online in this day and age of technology, which makes personal data more exposed than ever. Digital …

The Legal Consequences of Cybersecurity Breaches in Singapore

Technology has advanced greatly in the digital age. It paves the way for a higher risk of cybersecurity breaches. There …

Branding

What Are Virtual Fitting Rooms and How Do They Work? (2023)

Shopping for clothes online can be tricky. It’s difficult to know how something will look and fit without trying it …

Planograms: What They Are and How They’re Used in Visual Merchandising

As a retailer, you know the importance of creating an appealing and organised display of your merchandise. The way you …

PSG Grants: The Complete Guide

How do you kickstart your technology journey with limited resources? The Productivity Solution Grant (PSG) is a great place to …

The Importance of Authenticity in Your Brand Voice Strategy

Most companies are aware of the value of branding. The reputation of a firm may make or break it, after …

Featured Snippet Optimization: Complete Guide In 2022

You’ve probably seen the boxes that pop up at the top of the SERP featuring a summary of an answer …

Business

15 Ways to Remain Empathic While Still Making Deals

Empathy is an essential quality in any negotiation. It allows you to understand the other party’s perspective, build trust and …

10 Prospect Qualification Mistakes That Are Hurting Your Sales

10 Prospect Qualification Mistakes That Are Hurting Your Sales Prospecting is one of the most important aspects of sales. It’s …

How Pros Write Business Proposals To Win New Clients

As a business owner or entrepreneur, one of the most critical skills you need to have is the ability to …

Baidu SEO: Optimising Your Website for Chinese Audiences

In today’s interconnected world, expanding your online presence to capture international markets has become essential. When targeting the Chinese market, …

Time Management Tips for Busy Entrepreneurs (Free Tools)

Are you one of the entrepreneurs juggling multiple tasks, constantly racing against the clock? Do you often find yourself overwhelmed …

Most viewed Articles

Other Similar Articles