Just as in a physical store, inventory management in eCommerce is vital to run a successful business. Knowing how to manage your stock with a detailed plan, allows you to save money, be more efficient, optimize resources, and most importantly: increase sales.
In this process, different phases must be taken into account, and you must be prepared for the unexpected. With this in mind, our Onibex experts explain 3 practices of understanding inventory management in an online store.
The first thing you need to understand is to know the demand for the products you have. For this, Google Trends and Google Analytics are the basic tools, since in the first one you can see the levels of search, therefore of interest, of products and services in different periods; and with Google Analytics you can understand how people browse your site and the products in which they stay longer. This will help you have a forecast to calculate the inventory needed to fulfill future orders.
a) To manage your inventory well, you must know your minimum par levels, that is, the minimum amount of product you must have on hand at all times. The perfect measure is to have enough inventory to meet demand within four weeks.
b) Do the called ABC Analysis to understand which products are most valuable to your business goals. To do this you should make a list of your products, quantity, and value to determine the potential revenue. With this measure, you can classify them into those products that need more planning and control (A), which ones have a medium level of sales and control (B); and which ones represent less revenue (C).
c) The third option is First In - First Out, which means that those products that are part of the oldest stock must be sold first. For this, you can have an average of storage cost, market price fluctuation, and selling cost. If these numbers generate losses, it is best to generate offers or discounts to move those products.
This might seem a simple step, but it is very important since it is not only about choosing an economical service, but also the solution that adapts to your real needs in the digital world.
Among the things you should take into account when selecting it: that it synchronizes with your sales website or order logistics management, that integrates your online sales channels, that it provides you with demand projections and stock replenishment, that gives you notifications when items are running low, that keeps track of all relevant product information and that it adapts to market price fluctuations, so that they do not affect your sales.
There are many options on the market, but few generate a complete solution integrating everything seen in this article. The most important of them is the Onibex solution that turns your e-commerce into an optimized and self-sustaining sales cycle so that you can take care of the most important thing, which is your business.