Inventory management is critical to businesses that sell products online. Broadly speaking, it encompasses all the processes and tools you use to keep track of stock levels as you sell. Without inventory management, it’s difficult to fulfill orders, grueling to figure out when to buy new stock and next to impossible to grow without throwing your business into a state of confusion. The question is how to put good inventory management into practice for your business.
How do you manage your inventory?
If your business is like a lot of companies, it can get messy. That’s because, in too many cases, it takes a lot of manual work to match your online orders with the products you are supposed to send to your customers.
Your order information will be in one place, say your Amazon or Shopify account, and your inventory information will sit on a spreadsheet. If you want to avoid problems, like selling the same product twice, you have to be diligent about adjusting your stock in your spreadsheet and making sure your online channel shows customers the correct available stock information.
Good inventory management requires accurate data
That may not be a big issue when you’re starting out, but as you sell at a higher volume or through more than a single channel, those manual processes begin to eat up your time. Even worse, people make mistakes, so manually copying information from one place to another carries a risk of error that can disrupt your business. That can result in you thinking you have a certain amount of products to sell when in fact you don’t. And with manual processes, the amount of time you spend updating your spreadsheets and software means the information can be outdated as soon as you’ve finished saving it. So good inventory management really comes down to the accuracy and timeliness of your data.
Good inventory management improves online business
When you keep your stock levels accurate and timely, you put your online business in-line to sell more and reduce your costs. In the first place, accurate inventory lets you show accurate stock levels on Amazon and your website. That, in turn, means your customers know what products are available for purchase, but it also prevents you from unexpectedly running out of a product or selling the same product twice. Either of those can be disastrous for building customer loyalty and repeat business. When your customers are disappointed, they’re less likely to buy from you again.
To get the best inventory data, it’s best to connect what happens in Amazon with what happens in your storeroom or warehouse. You can try to make your existing processes work, but that will pull your time away from the more important work in your business. Or you can invest in new technology. When businesses begin to lose track of inventory, lose sales or see their costs increase because of their inadequate processes, they use inventory management software to replace their spreadsheets and single-purpose apps.
Cin7 is a cloud-based inventory management platform built to give online businesses real-time visibility of their stock, accurate costs, and automated order processing to make selling online more cost-effective and efficient.