A business’s available stock is a small part of its inventory. However, managing it frequently and comparing inventory available in different periods can help your e-commerce business make long-term choices about its supply chain. There are several ways to manage your product. Most of these methods will reveal ways you can use to grow your business. This article will describe some of the techniques you can use to keep your products up to date.
This method stocks products every time a customer makes an order. The amount of inventory available will always be equal to the number of requests you have to fill. In this case, you manage only the product you need to deliver to the customer. Your workload depends on the number of orders you have to ship. For Just-In-Time to be viable in the long-term, you need to analyze your customer’s buying behavior. This observation will help you plan for demand ahead of time.
2. First In, First Out
This technique means that the first products to go to your online store will be given priority whenever there is an order from the customer. This method ensures that inventory does not stay in your store for long before it is delivered. This type of store management is common in the food industry where the business owner needs to keep up with the expiration dates of perishable goods. The need to deliver products while they are still fresh is essential towards maintaining a high level of demand.
3. ABC Analysis
ABC analysis is known as selective inventory control helps businesses with different product lines prioritize the content of their e-commerce stores. This control involves grouping products into three categories by the product’s importance. Category A contains inventory that is high in value but low in quantity. Products that are moderate in value and quantity are under category B while products low in value but high in quantity are in category C. This technique requires business owners to observe the buyer’s interest in each product. However, not every product will fall entirely into the various groups.
4. Par Levels
Using the par levels is considered as a safety net for most businesses as it ensures there is a minimum amount of each product at any time. The company will always have products available in case of an order. In this method, the par levels warn you whenever it is time to restock your store. It establishes a warning line whenever the products go below a specific number. The par level shouldn’t be confused for emergencies where you may need an additional product. Consider the time it takes to restock before setting your par levels. For instance, the product that takes more time to restock should have a higher par level than the other products. The higher par level will help you acquire or develop the new product before you deplete the current stock.
This management method does not involve storing products in your e-commerce site. You ship products from the manufacturer to the customer. Dropshipping favors companies that do not have storage space. It is crucial that you communicate with the shipping party to ensure orders are fulfilled on time. You may not be delivering the products, but keeping your customers happy by communicating will go a long way.
6. Demand Forecasting
Forecasts are almost inevitable for any business to succeed. Create a long-term outlook for your sales to aid in anticipating when demand fluctuates. There is management software to assist in this process. The easiest way to predict your demand is to observe the previous year’s sales and using it as a guideline of inventory changes to expect in the current year. Consider factors such as market conditions and seasonality as factors that influence the fluctuation in sales. If you use inventory management software to automate this process, it is crucial to ensure the system factors in all the essential variables.
Managing an e-commerce store is essential for the success of any business. Create a great relationship with every person that comes into contact with your products. It may be your employee or your shipping merchant. Communicate with your workmates and support them the same way you help your clients who visit your online store. Follow the tips above and keep your products updated.