eCommerce inventory management<\/span> refers to<\/span><\/a> the act of tracking or measuring the amount, location, pricing, and mix of inventory products available from your online business. Practicing <\/span>inventory management for eCommerce<\/span> allows business owners to determine what products are in stock, overstocked, and already out of stock.\u00a0<\/span><\/p>\n
Why You Should Have a Reliable <\/span>eCommerce Inventory Management<\/span>\u00a0\u00a0<\/span><\/h2>\nInventory management for eCommerce<\/span> plays a crucial role in the success of your online business. Without proper <\/span>eCommerce inventory management<\/span>, your overall business performance may suffer losses. Some of the detrimental effects of poor inventory management may include but are not limited to the following:<\/span><\/p>\n
\n- Higher Holding Costs<\/span><\/li>\n
- Cash Flow Uncertainty<\/span><\/li>\n
- Poor eCommerce User Experience<\/span><\/li>\n
- Inventory Understocking or Overstocking<\/span><\/li>\n
- Missed Sales Opportunities<\/span><\/li>\n
- Difficulty in Performing\u00a0 Inventory Tracking<\/span><\/li>\n
- Losing Customers in the Process<\/span><\/li>\n<\/ul>\n
In contrast to the effect of poor <\/span>eCommerce inventory management<\/span>, having reliable and effective<\/span> inventory management<\/span> for your <\/span>eCommerce business<\/span> may result in:\u00a0<\/span><\/p>\n
\n- Improved Sales<\/span><\/li>\n
- More Time and Money Saved<\/span><\/li>\n
- Better Inventory Forecasting<\/span><\/li>\n
- Increased Customer Satisfaction<\/span><\/li>\n
- Efficient Inventory Planning and Ordering<\/span><\/li>\n
- Improved Customer Engagement and Retention<\/span><\/li>\n
- Better Warehouse Organization and Productivity<\/span><\/li>\n<\/ul>\n
Common <\/span>Inventory Management<\/span> Problems and Effective Ways to Overcome Them<\/span><\/h2>\n <\/p>\n
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Inefficient supply chain and <\/span>inventory management for eCommerce<\/span> businesses cause retailers worldwide to lose more than <\/span>$1.8 trillion annually<\/span><\/a>. Whether you are running an Amazon business or other eCommerce businesses, challenges in <\/span>inventory management<\/span> will always be present.\u00a0<\/span><\/p>\n
In contrast to the effect of poor <\/span>eCommerce inventory management<\/span>, having reliable and effective<\/span> inventory management<\/span> for your <\/span>eCommerce business<\/span> may result in:\u00a0<\/span><\/p>\n
- \n
- Improved Sales<\/span><\/li>\n
- More Time and Money Saved<\/span><\/li>\n
- Better Inventory Forecasting<\/span><\/li>\n
- Increased Customer Satisfaction<\/span><\/li>\n
- Efficient Inventory Planning and Ordering<\/span><\/li>\n
- Improved Customer Engagement and Retention<\/span><\/li>\n
- Better Warehouse Organization and Productivity<\/span><\/li>\n<\/ul>\n
Common <\/span>Inventory Management<\/span> Problems and Effective Ways to Overcome Them<\/span><\/h2>\n
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Inefficient supply chain and <\/span>inventory management for eCommerce<\/span> businesses cause retailers worldwide to lose more than <\/span>$1.8 trillion annually<\/span><\/a>. Whether you are running an Amazon business or other eCommerce businesses, challenges in <\/span>inventory management<\/span> will always be present.\u00a0<\/span><\/p>\n
Inventory Stockouts<\/b><\/h3>\nStockouts or out-of-stock refers to the unavailability of specific products that a customer is ready to buy. It is considered a primary concern for online retailers, for stockouts directly affect business revenue.\u00a0<\/span><\/p>\n
For a concrete example of the detrimental effect of stockouts, it is estimated that the U.S. retail food industry is losing sales between\u00a0 <\/span>$15 to $20 billion<\/span><\/a> per year.<\/span><\/p>\n
Suggested Solution<\/b>:<\/span><\/p>\n
Inventory Overstocking\u00a0<\/b><\/h3>\nOverstocking refers to purchasing voluminous products beyond what a seller can actually sell. It is when a retailer over-orders inventory items leaving them with too much stock or excess stock left sitting in their store or storage facilities.\u00a0<\/span><\/p>\n
It is also a common <\/span>eCommerce inventory management<\/span> issue faced by online sellers. Sellers tend to forget that keeping too many inventory items is as detrimental as having too few.\u00a0<\/span><\/p>\n
Suggested Solution:<\/b><\/p>\n
Similar to stockout, inventory overstocking can also harm your business. You can improve your eCommerce management inventory by stocking products based on their sales value. Try to avoid buying inventory items in bulk, especially for novel items that are yet to be tested in the market.\u00a0<\/span><\/p>\n
Warehouse Inefficiency<\/b><\/h3>\nIn relation to <\/span>inventory management for eCommerce<\/span>, warehouse inefficiency is one of the common issues sellers encounter. Inefficient warehouse practices can lead to safety concerns, increased warehousing costs, product damages, and even business operation delays.\u00a0<\/span><\/p>\n
Suggested Solution:<\/b><\/p>\n
In relation to <\/span>inventory management for eCommerce<\/span>, warehouse inefficiency is one of the common issues sellers encounter. Inefficient warehouse practices can lead to safety concerns, increased warehousing costs, product damages, and even business operation delays.\u00a0<\/span><\/p>\n
Suggested Solution:<\/b><\/p>\n
You must introduce changes in handling your inventory and warehouse operation to improve warehouse efficiency. In particular, you can improve <\/span>inventory management <\/span>and other processes by optimizing your <\/span>warehouse footprint<\/span><\/a>.\u00a0<\/span><\/p>\n
Loss of Inventory\u00a0<\/b><\/h3>\nInventory loss caused by damage, spoilage, or theft is another major concern of business owners that requires immediate action. Needless to say, regardless of the cause of inventory loss, its effect will always be unfavorable for your <\/span>eCommerce business<\/span>.\u00a0<\/span><\/p>\n
Suggested Solution:<\/b><\/p>\n
The best way you can resolve <\/span>eCommerce inventory management<\/span> issues such as inventory loss is to optimize your workflow, improve storage protection, and invest in critical facility improvements. These actionable ways can help lessen, if not obliterate, inventory damage.\u00a0<\/span><\/p>\n
Inventory Data Inaccuracy<\/b><\/h3>\nReliable <\/span>inventory management for eCommerce<\/span> businesses is critical to avoid data inaccuracy. Any inaccuracy with your inventory data can cause other issues in your business operation, including overstocking, understocking, shipment delays, and revenue loss.\u00a0<\/span><\/p>\n
Suggested Solution:<\/b><\/p>\n
In order to resolve data inaccuracy, you should frequently conduct stock auditing for your business. A stock audit may include cycle counting of different stock categories in small, manageable batches or annual physical inventory count.<\/span><\/p>\n
Pricing Issues<\/b><\/h3>\nIf you are anticipating a large inventory item from your supplier, ensure you are well-prepared to price your items. As part of <\/span>inventory management<\/span>, inventory pricing ensures that material handling and order fulfillment are successful and cost-effective in the long run.<\/span><\/p>\n
Pricing your items too low or too high will affect your revenue and lead to a negative brand perception among consumers.\u00a0<\/span><\/p>\n
Suggested Solution:<\/b><\/p>\n
Reliable <\/span>inventory management for eCommerce<\/span> businesses is critical to avoid data inaccuracy. Any inaccuracy with your inventory data can cause other issues in your business operation, including overstocking, understocking, shipment delays, and revenue loss.\u00a0<\/span><\/p>\n
Suggested Solution:<\/b><\/p>\n
In order to resolve data inaccuracy, you should frequently conduct stock auditing for your business. A stock audit may include cycle counting of different stock categories in small, manageable batches or annual physical inventory count.<\/span><\/p>\n
Pricing Issues<\/b><\/h3>\nIf you are anticipating a large inventory item from your supplier, ensure you are well-prepared to price your items. As part of <\/span>inventory management<\/span>, inventory pricing ensures that material handling and order fulfillment are successful and cost-effective in the long run.<\/span><\/p>\n
Pricing your items too low or too high will affect your revenue and lead to a negative brand perception among consumers.\u00a0<\/span><\/p>\n
Suggested Solution:<\/b><\/p>\n
You can use pricing tools to ensure that the products you sell are competitively priced and that all expenses are accounted for in your pricing strategy. To further enhance your pricing strategy, you can also use automated <\/span>repricing software<\/span><\/a> to adjust your products’ listing price depending on the market situation and competitors’ behavior.\u00a0<\/span><\/p>\n
If you are selling on Amazon, you can utilize an <\/span>AI repricer<\/span><\/a> to help automatically set your listing price to a competitive level. Thus, giving you a more competitive edge over other competitors.\u00a0<\/span><\/p>\n