Although cash flow and promotional marketing may be more top-of-mind concerns for online stores, inventory management is another element of business that should never be overlooked. According to recent reports, poor inventory management costs up to $300 billion across the United States in 2018 alone. This is primarily because lackluster inventory management can cause overbuying, errors in inventory ordering, and missed consumer trends.
For online stores, these problems can be compounded by the fact that many business owners either store inventory at home and underestimate it or keep inventory at a separate location and only do casual, infrequent check-ins. In order for online stores to keep thriving, though, they must invest in better inventory management. And with that in mind, there are a few things you can do in order to streamline your inventory management systems and improve operations.
1. Categorize your inventory
It may seem like a given, but you’d be surprised how many stores (both physical and online!) fail to properly organize their inventory. Rather than simply storing your goods neatly, try to determine a way to categorize them. For instance, if you sell makeup, instead of just sorting products by brand, try sorting them by use, too. This will lessen the time you spend searching, and give you a clearer idea of what you actually have in stock. Another way you can categorize your inventory is based on how well items sell. Among large retailers, many choose to keep their top-selling items closest to their fulfillment areas. Via this same organizational approach, you can keep hot items more visible and accessible.
2. Use an inventory management software
In a study of small businesses, 43% of respondents said that they use a manual inventory system or none at all. These can be costly choices considering human error, siloed data, and security vulnerability. On the other hand, inventory management software is scalable, secure, and automated. Since inventory management systems are accessible on the cloud, you can easily review your updated and accurate inventory at any time.
Since there are many software options available, it’s best to opt for programs developed by IT experts with extensive educational backgrounds in computer science. Because these professionals are knowledgeable of the tech and principles that go into software design, they are able to create programs that are flexible and expandable for your business’s unique needs. For instance, the Asalta Inventory Software is easy to integrate within your business because it’s been specially designed for the demands of SMEs. With inventory management software that’s suited for you in place, you can enjoy more accurate and detailed inventory data.
3. Practice a barcode inventory system
Traditional inventory management involves carefully and tediously writing down product details and serial codes. One solution that will hasten this process while also improving product picking accuracy is a barcode inventory system. With this sort of system, unique barcodes are assigned to each product. Barcode scanners are then able to read the codes and immediately log item details into an online system, reducing the chances of your customer receiving an incorrect order.
Nationwide surveys show that 30% of all online orders are returned. Among the top reasons behind these returns is that customers receive incorrect orders. These instances can cost you, not only in terms of profit but where your reputation is concerned as well. Barcodes can help you to avoid these issues, and will in addition provide delivery transparency. Delivery personnel can scan your packages’ barcodes and update your inventory management system on the delivery status of any given item.
4. Be consistent with your auditing
To prevent inventory inconsistencies that can pile up, be vigilant with your inventory audits. With regular auditing, you can double check that your business efforts are aligned with your inventory movements.
The three main types of inventory auditing are physical auditing, cycle checking, and spot-checking. Ideally, you should audit a few times each year. If your operation has gotten larger, though, you may need a professional auditor –– both to ensure impartiality and to enable more frequent monitoring. And in the event that COVID-19 restrictions make it difficult to secure the services of an auditor, you can look for one with experience in video observation. Though this technique may require more hardware, like a reliable camera, it will help you to benefit from the expertise of an auditor who can help provide clarity to your business.
Online businesses are poised to take up a larger chunk of the consumer market as more consumers’ preferences shift toward the virtual. However, in order to capitalize on this opportunity and safeguard the sustainability of your business, it’s important to be mindful of more technical aspects like inventory management. By doing so, you’ll make your business easier to maintain, scale, and promote.