Keeping track of your inventory can be a bit uninteresting. Inventory tracking is one of things that you really don’t think about, nor care about until something goes really, really wrong. Messing up inventory tracking can have catastrophic results for an ecommerce business.
What could happen if you get it wrong?
I’m glad you asked, here are a few things that could really mess up your business.
1) Running out of goods/products to sell without realizing it
2) Becoming flooded with a never ending stream of backorders.
3) Overall poor customer support due to the delays and general disappointment.
If those aren’t enough reasons for you to consider tracking your inventory, here’s one more – you can lose a lot of money and a lot of potential customers.
What is inventory management?
Before we even begin, let’s first take a look into what inventory management actually is. Inventory management is exactly what you think it is: monitoring, handling, and controlling all items ready for sale to consumers. This might seem simple, yet it’s anything but.
Poor inventory management affects:
Customer experience. You may unknowingly not have enough of a certain product in stock to accommodate demand, but keep selling it on your site anyway. Something you can’t afford to take for granted when most businesses compete on customer experience – disappointed customers are highly unlikely to come back.
Finances. Investing in stock that remains unsold can severely eat into overall profits. You’ve bought the goods, but there’s no way to secure an ROI if they stay sitting on a shelf in your warehouse.
So your job with inventory management is to simply ensure you have the right amount of inventory, in the right place, at any particular time. Simple enough, right? Let’s see.
Your business can balance its inventory for optimal cost-effectiveness and flow. With inventory forecasting at the core of this concept. But why is that?
Because it empowers you with the information you need to know which items are most in demand. And armed with these details, you can avoid:
Overstocking. You have money tied up in every product you buy – each one eating a hole in your pocket until the moment it’s sold. Overstocking is therefore just wasted cash. It also may be taking up room in your storage area that could be used to house other, better selling items.
Stockouts. Not knowing how to keep track of inventory accurately means you may well run out of stock without realising.
Demand forecasting can be a challenging process but it’s well worth it to prevent you being unprepared. For example, shifting trends could see a huge spike in a particular line or type or products that you currently only stock in small quantities — or not at all.
Spreadsheets are simple, widely available and extremely easy to use. This is why they’re the preferred method to keep track of inventory. But are spreadsheets the best solution? No, not even by a mile.
The pros of spreadsheets are the following: almost anyone can use and edit them, there are templates widely available, they are cheap, effective and can be updated quickly. But on the downside, spreadsheets have a huge disadvantage – inputing data and checking accuracy is hugely time-consuming.
Software to help track your inventory levels
There are dedicated third-party tools that help you actively and automatically manage your stock levels. Think about it like this: You have an item that you’re selling on 4 ecommerce platforms: eBay, Amazon, WooCommerce and Shopify. What happens if someone buys the item, at the same time, on two different platforms? You will have to cancel one of the orders and get negative feedback.
What if the stock levels on all of your ecommerce platforms would be synced? If you sell a product on eBay, then that’s it, it’s out of stock everywhere now, you won’t oversell. NVENTREE does just that, plus much more, such as giving you the ability to despatch orders, print labels, send invoices, create pickwaves, and much more.
While inventory tracking can be difficult and cumbersome, we are sure that by following these tips you’ll find it much easier. Now that you’re aware of what can and can’t go wrong if your inventory isn’t properly tracked and managed, you’ll understand why we’re so keen on helping our customers manage their inventory and orders.
Use the tips and methods outlined above to transform your current inventory management strategy. And avoid common stock-related problems that may prove costly, both in regards to your finances and customer loyalty.