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The Best Techniques of Inventory Management

The Best Techniques of Inventory Management

If you are an e-commerce business and are looking to give your business a boost, then you must be mindful of a few essential parameters. While most companies spend a lot on marketing and promotions, they fail to look at the finer aspects of the business; inventory management is one such important aspect of any e-commerce business.

The role of inventory management is to supervise the movement of goods from the point of manufacturing to the storage point, which is the warehouse, and from the warehouse to the point of sale.

The supply of goods in e-commerce must be regulated effectively so that the customer demands are met satisfactorily without creating any dead stock. Today various tools can help you manage your stocks and inventory efficiently; Shopify inventory management is one such platform that offers the best software to handle any size inventory. There are also some useful techniques and industry-acclaimed best practices that will make your inventory management task easy.

Bulk Shipping of Products

This practice is most applicable for your fast-moving goods, which are always in high demand. You can manufacture them in bulk and store them in your warehouse so that you never run out of stock, and your repeat shipping cost on the product is also reduced. However, do not adapt to this method if you are unsure of the demand for the product. This method works brilliantly for staple products with assured demand and long shelf lives.

Follow the “ABC” of Inventory Management

“ABC” is a widespread practice in inventory management. It is a method that is based on segregating products and raw materials into different categories per their importance.

In this practice, the category A denotes the most valuable goods and materials, B represents items with a medium demand rate, and category C is comprised of goods that are of least importance or of minimal demand.

This method helps inventory managers understand the stock level of high-value goods and make appropriate stock ordering and managing decisions.

Receive Backordering

If your products are loved by customers and are quite popular, then this technique can work very well for you. Backordering is a scenario where the customer orders a product, but they know that the order will not be fulfilled immediately. This method is quite popular for gadgets and mobile phones, where the customers pre-order the product, even before it is launched in their country. For such products that are of value or are in high demand, the customer is willing to wait.

For inventory managers, backordering helps them to understand the demand and order goods accordingly. However, not all brands can leverage this opportunity, as most customers do not like waiting too long for their products, especially if they are necessary appliances or simply not worth waiting for.

Automate Supply-Chain Management

Most big brands today have automated their inventory management. When your processes are no longer dependent on manual supervision, the efficiency of your workforce increases. Additionally, automation ensures that you never run out of stock, and your goods are replenished in the proper quantity and in advance. Also, with supply chain automation, you can receive instant alerts on your stock levels and generate details on various functions linked to your supply chain management.

The Bottom Line

Inventory management is indeed the backbone of every e-commerce business. Being efficient in inventory management comes with a host of benefits that will add to the revenue of the company in the long run. Whether you are a large-scale manufacturer or a medium-size business, inventory management will help you make data-driven decisions that will improve your overall productivity. So, minimize your inventory costs and increase the overall customer happiness quotient with an efficient and automated inventory management system. Happy customers mean more business.

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by Lottie Pritchard // Lottie Pritchard is a contributor to Businessing Magazine.

Opinions expressed by contributors are their own.