For ecommerce companies like yours, having smart inventory management strategies is essential. You need to ensure that you never have too much of a product that doesn’t sell well, and you don’t want to run out of popular products.
It’s a delicate balance.
To help you, here are a few tips that are proven to work for online entrepreneurs like you.
1. Use an Inventory Tracking System
Inventory software like inFlow and Xero update your information so that every sale reflects a reduction in inventory. You can even get notifications when one product is running low so that you have time to order more. Software like these two examples are designed for small business owners, not giant corporations, so they’re custom-tailored for your needs.
2. Do A Manual Inventory Review
Even with your software handling the bulk of your inventory, it’s still a good idea to manually review what’s on your shelves every quarter or season, especially before the winter holidays.
Doing so as part of your inventory management strategy will help you get visibility into which products are just gathering dust, which can help shape your future purchase behavior. You can also decide to bundle these no-sellers with more popular items as a great promotions strategy to clear out old inventory.
3. Work to Improve the Inventory Flow
Take this time to think about any bottlenecks you have in the inventory process. Maybe you have one vendor who always takes a long time to deliver your goods, putting you at risk of not being able to fulfill orders during your busiest season. In that instance, it’s time to look for another vendor or plan your orders out far enough in advance to ensure you’re never out of stock.
Assess each vendor you work with to ensure that each is living up to his end of the bargain: do all the products arrive intact? On time? At a reasonable price that allows you to make a decent profit margin? If the answer to any of these questions is no, look for a new vendor, but don’t get rid of the old one until the new one proves worthy of your investment.
4. Use Barcodes
If you have hundreds or thousands of items in inventory, you’ll save yourself a major headache if you invest time up front in barcoding them all. This ensures you can scan each product as you ship it out, and that your inventory software will automatically update the system.
Yes, it will take time up front, but in the long run, you’ll save a ton more of time with your easy-peasy scanning system.
5. Rotate Out Inventory
You’d think using the oldest inventory first would only apply to food, but it applies to almost anything. Bath products can go bad, so you want to sell them before that happens. Even clothing, toys, and accessories should be rotated, just to give your customers the best products that haven’t been falling apart on the shelf.
You can develop your own inventory management strategies beyond these once you see what works for your ecommerce business.