Ecommerce selling has got into a whole new level with multi-channel adoption. With the selling channels, customer demands and selling opportunities increasing simultaneously, the need for effective inventory management strategies is also in the rise. The first question which arises to a ecommerce business owner’s mind is how to manage inventory for online store without making no room for errors.
Well, there are multiple, tried and tested inventory management software and methods. Though a little bit conventional, they are effective methods of inventory management which online stores can still adopt. However, a mix of modern inventory management methods and traditional methods will do a great deal of good for online store inventory management.
Let’s begin with warehousing. Getting your warehousing right is crucial when it comes to multi channel ecommerce retail selling.
1. Hybrid Warehousing
Hybrid warehousing is a mix of self warehousing and third-party dependent stocking but you should be the one deciding what products to keep for your warehouse and what should stay in the warehouse of your suppliers.
Hybrid warehousing is followed by ecommerce majors like Snapdeal, Homeshop18, Jabong etc. For instance, products like books, electronic gadgets are kept in own warehouses while heavy products like air conditioners, washing machines are delivered from the suppliers’ location once an order is placed. Hybrid warehousing is one of the best inventory management methods that can help you moderate holding cost.
2. Universal, Equal & Trend – Choosing the Right Stock Allocation Technique
Smart allocation of stocks is one of the key blocks for building effective inventory management strategies for online stores. If you have 100 SKUs of a single product and 3 sales channels, your stock allocation can be done in the following three ways.
Equal allocation – Simply distribute the number of stocks into equal shares so that each sales channel will have same stock quantity.
Trend allocation – Trend allocation is purely based on sales numbers of each sales channel. Sales figures reveal sales-channel-specific demand for any given product.
Universal allocation – Universal, as the name suggests, is nothing but providing the same number of stocks for each sales channel.
3.Outsource eCommerce Fulfillment
Outsourcing is one of the successful inventory management methods for ecommerce retail. By outsourcing your inventory, you not only answer the pestering question of how to keep track of inventory for online store but also handover the complete fulfillment process to a third-party vendor.
For instance, using Amazon FBA (Fulfillment by Amazon), you can handover the process of warehouse stocking, picking, packing and shipping to the doorsteps of your consumers to Amazon itself.
In cases where you sell via sales channels other than Amazon like ecommerce store or other seller marketplaces, you can make use of third-party ecommerce fulfillment providers like Shipwire or Rakuten. These ecommerce fulfillment providers store your finished products in their own warehouses.
4. Cross Platform Tracking
Integration of a seamless inventory management software is a must in order to avoid cross-platform overselling. Centralizing your inventory management activities done across multiple sales channels is one of the best inventory management methods that keeps mistakes at bay.
With inventory details being centralized, you can know which sales channel needs how many number of stocks to be replenished in real time. This is one of the effective methods of inventory management which can be used by ecommerce retailers who ship products for all sales channels from a same warehouse.
5. FIFO – What Comes in First, Goes Out First
FIFO is one of the proven methods for methods of inventory management for online retail especially in case of selling perishable goods. Make sure the stock which has reached your shelf first should be shipped first.
Even in case of non-perishable goods, there are chances for your goods to get depreciated or worn out. You may also come up with new packing design or product models. In such cases you run the risk of outdating your own stocks that are still lying in your shelves unsold.
Inventory management forms the base of your ecommerce business success. In order to determine perfect optimum inventory management procedure that works out well for your business, try going for a online store inventory management software that helps in implementing the above discussed effective inventory management strategies.