6 Reasons why inventory management will help your business grow
Find out why more ecommerce start-ups are turning to inventory management to grow their businesses into multi-million dollar enterprises.
Starting your own ecommerce website in today’s market might seem like a very daunting task. Going up against the already established businesses is not easy. Furthermore, matching the low prices offered by these veteran online merchants is a difficult prospect for startups that might not have enough financing to ride the wave until they start breaking even.
Ecommerce startups must find a viable way to exist and thrive in this competitive market. That is why it is imperative for ecommerce startups to integrate multichannel selling in their business models. Not only will this help counter the competition, but it will also help them reach potential customers faster.
Where does Inventory Management come in?
Using multiple platforms to sell your products has many advantages for ecommerce start-ups. It allows you to increase revenues while giving your business opportunity to grow. However, it is not exactly an easy process for small businesses.
Different platforms offer different levels of competitiveness, and you might have to tailor your prices to reflect that. Related fees may also vary across the platforms. So, how do you know how much profit you are actually making?
Keeping track of inventory will further compound the problem. Let us say you have 20 items in stock, and you put them up for sale. You sell 15 of these on your site but then receive seven orders of the same from your listings on eBay and Amazon, for example. However, you have not yet ordered more stock from your supplier!
Overselling is one of the top challenges multi-channel ecommerce sellers experience today. Such a situation can very easily lead to bad PR and reviews for your fledgling company. Thus, using good inventory management software is the only way to run your business well and keep your customers happy.
Apart from this, the greater problem that could be keeping your new online venture stuck in a rut is underselling. Recent studies show that 46 percent of small businesses do not track their inventory, or use manual systems to do so. This has led to massive losses: for example, American retailers recorded over $220 billion in losses caused by excess inventory in 2014 alone.
That is a staggering figure and start-ups cannot afford to be part of this dismal trend. Implementing a proper inventory management system will save your business time and money. Today’s inventory management software combines all your stock concerns across multiple channels into one comprehensive system, ensuring that your best selling products are always available.
Growing your business through Inventory Management
While inventory management software can be costly initially, they are a tremendous asset for new small businesses. However, the truth is that customers give new players even less room for error. That is because you have not yet built up a solid track record of trustworthiness and consistency. Any overselling or late deliveries will always be seen as suspicious or even worse, fraudulent.
Here are six advantages of inventory management software for your ecommerce business:
1. Cloud-based accessibility
Inventory management software is very accessible, allowing you to keep track of stock from anywhere and at any time. They typically come with mobile app functionality and also offer cloud-based storage, which lets you update your stock requests while on the go.
You can scan new shipments as soon as they arrive from the supplier, thus updating your stock list automatically. Furthermore, the software helps you analyze what is selling and what is not. This then helps you track demand and identify how often certain products should be restocked.
The fact that the whole process is automated reduces the room for error, cutting down unnecessary spending or loss and improving your business’s overall efficiency.
2. Sell online and in stores
Many of the top advantages of inventory management software lay in their automation. This fact can be clearly seen in how these systems can sync with your online and offline points of sale to always give you up-to-date numbers.
This means you can easily link your cloud-based stock records with sales records from your online platforms and physical point-of-sale systems. Not only does this improve your business’ efficiency, but it is also a flexible and easy-to-use system for your employees.
3. Cut down shipping time
Stock taking will eat up massive chunks of your time, but nothing compares to how consuming the shipping process is. Previously, ecommerce companies had to manually type in addresses, print out labels, and tag each parcel for delivery.
However, inventory management software lets you cut this whole process down to a matter of minutes. The systems pull in all your orders across multiple channels and allow you to print the labels in bulk from a centralized place.
4. Expenditure versus profits
We have already established that multi-channel selling can be very tricky. Not only do you keep track of supplier costs, but you also have to take into account the varying listing fees that apply to different platforms. This means that you might be selling a lot of product but unaware of what your gross profits are.
Therefore, using inventory management software to compare purchase costs with your selling prices is vital. This ability to break down expenditure and profits by platform will enable you to identify problems and correct them as soon as they occur.
These systems also let you dig deeper and identify what your best selling products are. This information will directly influence how and when you place orders to your suppliers. Furthermore, by analyzing return rates across multiple channels, you will also quickly identify which products have issues that need to be rectified.
Whether you keep the books yourself or you have hired an accountant, inventory management lets you keep a close eye on your accounts. Inaccurate numbers can kill a business very quickly as one simple accounting mistake can cost you thousands of dollars in loss.
These software systems let you sync all the daily completed orders with one click of a button. This saves you a lot of time when it comes to balancing the accounts at the end of every month.
6. Cut down hiring costs
It is typical for any new business to get overwhelmed and start hiring more people to help. However, investing in a great inventory management system right from the beginning can help cut down on hiring costs.
One of the advantages of inventory management software is that they automate your whole supply chain. This means you avoid hiring because you feel overwhelmed or disorganized until your business actually grows large enough to demand more staff.
The final word
Customers are always on the lookout for ecommerce apps that can give them lower prices, faster delivery times, and quicker stock turnarounds. Therefore, it is crucial that you invest in effective inventory management right from the outset.
This will help you run your business more efficiently while concentrating on what really matters: Promoting your brand and improving your profits.
Talk to our experts who will help you choose the right lifetime asset for your company.