How to master your inventory management

If you want to stay afloat as an e-commerce business, you need to do more than just make consistent sales. When the sales start coming in, great - but the more popular your site becomes, the more cracks will become exposed in a poor inventory setup.

Effectively tracking and managing your stock is key to successfully operating your e-commerce business without overwhelm or mistakes that could cost you your reputation. When your inventory is properly managed, you can optimise your operations by preventing stockouts, and ultimately boost your profitability.

This article discusses the top tips for mastering your inventory management.

Track your inventory in real-time

Understanding your inventory comes from having constant access to it (even if this access is remote).

Maintaining accurate and up-to-date records of your inventory levels will help you to know exactly what’s coming out on a daily basis. You can make tracking easier for yourself by organising your products into manageable categories, which will allow for better oversight.

If you have access to your own product (rather than drop shipping, for example), it’s also key to optimize your warehouse or storage space so that you can efficiently retrieve products as needed.

Predict demand and prevent stockouts

Another winning tip for keeping on top of your inventory management is to predict demand for your products and avoid the dreaded stockouts.

Assuming that you already have some form of sales data analysis tool, use this to look at your historical sales data and forecast future demand. This will help you keep hold of enough stock to ride you through the ups and downs throughout the year.

You also need to stay updated on market trends and customer buying behavior—you’ll struggle to shift stock that customers are no longer interested in, for instance.

Finally, it’s a good idea to maintain a buffer stock or a “safety stock” so you’re prepared for unexpected demand spikes. You want to be able to give your customers what they want in this best-case scenario, not deal with the hassle and revenue loss of refunds.

Optimise your stock levels

Finally, there are a few tips and tricks you should know about when it comes to optimizing your stock levels.

You can use ABC analysis to categorise your products based on value and sales volume, which will help you to prioritise your stock management. 

If you’re selling on multiple platforms, you can use an inventory management tool like Syncio Inventory Management to seamlessly sync your stock across your different stores to avoid stock discrepancies.

Speaking of tools, you can use specialised software to track and analyze your stock. In this day and age, there really is no need to be relying on spreadsheets, or worse, handwritten notes. 

Takeaway

Managing your stock efficiently is essential if you’re strategising to grow your e-commerce business.

You want to be prepared for when your sales start to multiply, but equally, you don’t want to shoot yourself in the foot by buying far more stock than you need.  

Implementing the strategies outlined in this article should help you achieve optimal inventory levels, reduce your costs, and ensure your customers only have positive things to say about your business.