How to Optimize Inventory Management for eCommerce Business

No one wants to wait weeks for their products. With Amazon and other retailers promising to get products to consumers within days of ordering, you need to be able to compete effectively. As such, inventory replenishment is more critical than ever.

Consider how often you run out of items. How long does it take to stock your online store so you can send out orders? If you feel as though you’re always running out of your most popular items, it’s critical that you focus on inventory management to succeed.

Identifying overstock can help you run your online store more efficiently and produce better cashflow. This way, you know which products need more promotion to increase your returns.

8 Ways to Optimize Your eCommerce Inventory

Avoid Out-of-Stocks

You cannot risk being out of stock for too long. This can require you to send awkward emails that explain that you are out of certain products. It can cause people to lose trust in your ability to provide them with what they need. It can cause lost revenue and also lead to longer shipping times for customers and cause people to get frustrated.

Although you may know that you have out of stock items, you may not realize the full extent of the problem. If you are still relying on spreadsheets to tell you everything that you need to know, the process can be cumbersome and time-consuming.

You need to have an effective method of forecasting, and advanced technology can ensure that you are learning more about your stock, including what you have too much of and not enough of.

Give Customers More

You want to maximize the experience that customers have with you. In order to accomplish this, you need to make sure that you have the stock that you promise. There may be instances where you run out because you weren’t on top of a trend. However, you can make note of this on your website so that people are aware that it will be restocked soon. You can also add tools that allow people to be notified when the product comes back into stock, capitalizing on potentially lost sales otherwise.

Most eCommerce forecasting software platforms and apps do not track stockouts, leaving you vulnerable to not knowing everything you need to know.

Inventory is one of the most critical components of e-commerce. If you plan to have a successful online store, you need to make sure that the customer experience is the best that it can be. This includes accurately tracking stock so that customers have confidence that they are going to get everything that they ordered without having to wait. Additionally, having everything in stock will make it easier to send everything at once. This will save you time on shipping and allow eco-friendly customers to appreciate your desire to minimize packing materials.

Get More Positive Reviews

We live in a world where everyone shares their opinions. Online reviews can appear on your website, your latest Facebook ad, and even on Amazon or Google reviews. Many reviews are instantaneous – and other consumers are going to read those reviews to determine if they want to do business with you or not.

If people have to wait too long to get their products or they receive emails from you that tells them that something is out of stock after they have already placed their order, they are going to lash out. The way they lash out will be by leaving negative reviews. These can counteract social media ads that you are paying for as it will give people another outlet or negative comments. It can also reduce the amount of new business that you get as people read the negative reviews and get concerned about your ability to provide them with what they have ordered.

Forecast Future Demand Using Historical Data

One of the best ways to optimize your inventory is to accurately calculate future customer demand so you can order the right amount of stock to meet it. And the best way to accurately forecast future demand is by using inventory planning software that leverages historical sales data and other advanced analytics to produce reliable predictions. 

By understanding past trends, seasonal variations, and other data, you can plan your inventory replenishment cadence and quantity more effectively. This approach ensures that you have the right products in stock when customers need them, minimizing the risk of stockouts and overstock issues.

Set Minimum Stock Levels

Establishing minimum stock levels for your products can ensure you always have enough inventory to meet demand. Determine the minimum quantity of each item you should always have in stock to meet expected demand without the risk of running out. This proactive approach helps you maintain a safety net of inventory in case demand spikes while still preventing overstocking that can tie up cash flow. 

Adjust these levels based on historical data and changing customer preferences, ensuring that you strike the right balance between availability and cost management.

Prioritize Products With an ABC Analysis

An important part of optimizing your e-commerce inventory is getting organized. One way to do this is to perform an ABC analysis to classify your products based on their importance and demand. “A” items are high-demand, high-value products, “B” items have moderate demand, and “C” items are low-demand or low-value. 

You can then prioritize your inventory management efforts accordingly. For example, you can allocate more resources to monitor and replenish “A” items to prevent stockouts, as they have the most significant impact on your revenue. Use this classification to optimize your restocking strategies and maintain a well-balanced inventory.

Organize Your Warehouse According to Demand

Organizing warehouse layouts to match product demand is another way to optimize your stock. Place high-demand products closer to the shipping area for quick access, reducing order processing times. Similarly, locate low-demand items in less accessible areas to minimize handling costs. 

Efficient warehouse organization ensures that you can fulfill customer orders faster, improve order accuracy, and save on operational expenses. By aligning your storage system with demand patterns, you create a more efficient inventory management process that benefits both your business and your customers.

Implement Inventory Management Software like Inventory Planner

Inventory Planner is a unique software program that incorporates multiple forecasting methods. You can save time and make the most out of your purchasing.

eCommerce inventory replenishment is made easier when you know what items are popular. Inventory Planner identifies trends so you know which items are going to be popular at different times of the year. It can identify when you need to increase your stock so that you don’t deal with running out. Additionally, it can identify when you have an overstock of certain items, allowing you to liquidate and generate cash more effectively.

With stock optimization, it allows you to save time and money throughout the process. It may also give you a more competitive edge by ensuring that your stock is better than the stock of your competitors. It can even increase your sales by having more in-demand items properly stocked instead of driving business away due to a lack of inventory.

When you make the conscious effort to be on top of your inventory, it can have a dramatic impact on the overall success of your online store. Inventory Planner connects to many different platforms, giving you more insights about customer demand, trends throughout the year, and much more.

Using the latest technology helps you to develop a competitive edge. You can save money by getting a better return on investment (ROI) from your purchasing budget. Plus, you can make sure customers are satisfied with their experience by utilizing a more efficient process which leads sending out shipments sooner.

Stockouts don’t have to be something that “just happen.” You can prevent them from happening by staying on top of your inventory each and every day. Our software allows you to do that without having to study spreadsheets just to get the job done.

Learn more about Inventory Planner and the ability to discover over and understock products faster with our software. Start your free trial today to gain the efficiency that you need for a successful online store.