For the online sellers who wants to grow and expand their business in various geographies, Inventory Management plays a crucial role
What is Inventory Management?
Inventory Management does not mean only keeping stocks of the products in the warehouses.
Inventory Management is rather a process that involves Inventory update, orders, returns, replenish inventory, supplier, deliveries and tracking orders in integration.
Why to automate Inventory Management System?
An automated Inventory Management System will update the Inventory while considering the orders, deliveries, and returns of product. This will provide us exact stocks of the product along with its transient Inventory.
A proficient Inventory Management System should help the online sellers in planning their Inventory Management Strategy by monitoring the stock movements and analyzing the data.
This Inventory data analysis will help online sellers to understand when and how much to reorder the stock.
For a proper Inventory Management this is critical because reordering extra stock will just occupy the space and increase storage and maintenance costs. There are chances of holding dead stock or outdated products. In case of perishable stuffs its shelf life decreases. This can be more risky for online sellers.
On the contrary if the less stock is ordered then online seller may lose sales and credibility to his competitor.
Centralized and Real time Inventory Management System:
A centralized and real-time Inventory Management System updates Inventory for online,offline and warehouses. While doing this it considers all marketplaces and geographies. Online seller can view and track all the Inventory movement on a single dashboard.
The real-time Inventory Management System tracks the sales orders, returns and transient Inventories and deliveries and replenishes the stock and updates the Inventory on dashboard in timely manner.
This automated Inventory Management System helps online sellers to view exact stock, improve sales and avoid order cancellations due to stock outs.
Supplier role in Inventory Management System:
Online sellers can reduce their work by giving Suppliers limited access to their application, wherein suppliers can update few things like stock, price and can view and edit purchase orders related to that supplier only.
Deliveries and order tracking:
As discussed in the beginning delivery and order tracking are also part of the Inventory Management System. When a product is dispatched for delivery Inventory Management System should track this and update the stock count automatically and in time.
Inventory Management System should take care of stock count in case an online seller has multiple warehouses. Inventory of each sku at various warehouses should be maintained and online seller should have the privilege to decide from which warehouse the order should be fulfilled.
Record and Report:
A good Inventory Management system records all the stock movements and provide some analyzed past sales data to the online seller through Reports. This report guides the online seller to plan its Inventory Strategy.
For eg: The buying pattern for particular product can be analyzed with these reports.
Some good practices in Inventory Management for Online sellers :
Some minimum quantity should be maintained to avoid delay in delivery or in case a product demand increases so that online sellers don’t lose sales to competitors.
Drop shipping means that online seller does not have keep the Inventory on hand. Instead the sellers should coordinate with the supplier who holds the Inventory. The drop shipper picks, packs and ships the product to the customer. This can be useful for new online sellers.
This practise ensures that seller does not go out of stock because if all the in hand Inventory of seller is sold then he can fulfill the new order from the supplier.
FIFO (First In First Out):
The products that are first brought to your store or warehouse should be first to be sent out.
This ensures that the customers are receiving fresh stock and online sellers don’t have to deal with dead stock or outdated stock.
Online seller should carry out regular Inventory Audits on the analyzed data obtained from Inventory Management System application to identify high demand products, outdated stock and plan further Inventory Management strategy.