The growth opportunities for eCommerce sellers whether selling through sites like eBay or using their own website, are increasing day by day and is the competition. This is the reason e-commerce sellers are always looking for tips and tricks that help them to boost their profit and without cutting corners on quality. If you are also an online seller who wants his or her inventory management function to be flawless, cost-effective and profit contributing at the same time, then we suggest you try inventory management tips that boost your online store’s profit.
The first rule of inventory management is FIFO, and you would be wise to remember it if you want to boost your long-term profits. FIFO stands for first in and first out which means that the products that reached your shelf first need to be shipped first. This is highly important in case you are selling perishable stuff. Even in case of non-perishable goods, you should follow FIFO to ensure that none of the goods are outdated or get depreciated.
Use Powerful Inventory Management Software
Another smart inventory management idea is to invest in a multi channel inventory management software that allows you to track all sales and inventory in real time. The software will also help you to collect data on inventory turnover which will let you know which products are selling fast and which aren’t selling at all. The software will also help in creating gift cards and promotions, generate reports and most importantly scale up to grow with your business.
Hop onto Hybrid Warehousing
If you are hoping to moderate holding costs, then we suggest that you opt for hybrid warehousing which is a mix of third-party dependent stocking and self-warehousing. When opting for this method, make sure you decide which products will remain in your warehouse and which ones will need to be shifted to the warehouse of your suppliers. The best scenario would be to keep small items like books, electronic gadgets, etc. in your warehouse while keeping the heavy stuff like a refrigerator, air conditioner, etc. at supplier’s location.
Learn About Lead Time
The next step that needs to be followed is to learn about lead time. Your lead time is the longest turnaround time of all the materials you use to create a product plus the creation time. Knowing about the lead time will help you manage your inventory smartly and ensure that no customer should buy a product that is not instantly available as the lack of products offline that are visible online often leads to the negative customer experience.
Returns are a part of an online sellers’ life that cannot be overlooked or avoided. So, when one of your customers return a possibly damaged product, you might need to fix it before it can go for the sales again. To ensure that the product doesn’t return to the shelf without the proper fixing, you should make room for a quarantine section. It will ensure that your product availability levels are always accurate and no damaged products ever reach the customers.
Smartly Deal with Dead Stock Items
Dead stock is the stock that hasn’t been sold for a long time and is just not moving despite your many marketing methods. The reasons for dead stock vary from changes in the fashion world to over-committing to a product that’s not selling as fast as you want it to. When you face a pile of dead stock, you should cut your losses and move it by offering it for free with other products or selling it to another seller who offers a low price.
Create Contingency Plans
Last worthy tip that we would like to mention here is that you should create contingency plans in cases of a disaster like you ran out of the product you sold or the package got destroyed in transit. When you have contingency plans in such a situation like offering another product of higher value at a lower cost, it will ensure that you don’t lose a customer or get negative feedback that may potentially hamper your profits.
In essence, it can be seen that the steps to making inventory management better are easier than you think. You can adopt them from today and see the difference that they make to your business within a few weeks. We can assure you that you won’t be disappointed if you make the right decisions and inventory management would be an asset, not a liability.