Learn Effective Ways To Optimize Product Inventory For Online Store

Do Online stores lose because of poor product inventory and overstocked items?

The answer might surprise you.

If a customer has ever abandoned your Online Store because the pair of clothes they want is out of stock or if you’ve ever been forced to sell outdated products, there is a chance that it’s because of poor product inventory management. It is not just an internal process to a kept record of your stock but its direct effects on revenue and your relationship with a customer.

There are the following techniques that help you to optimize your product inventory

1. Prevent stock out

The goal of every business is to sell the product inventory in the least possible time, accomplishing this goal can ultimately lead you to stock-outs at some point. Out of stocks is unpleasant for everyone in the eCommerce food chain. A report states that online sales lose approx. $17 billion a year globally because a product was out of stock when a customer wants to buy it. When a customer didn’t find the product they want, they’ll substitute with a similar product instead of waiting for the product to be in stock.

Unfortunately, the damage that occurs because Stock out is beyond the lost sale. Too many out of stocks can ruin the brand’s trust and increase customer service costs and harm customer relationships. Also, make sure your stock and staff are ready so that you won’t fail to deliver the product or else a lot of effort and resources get wasted. In order to avoid stock-outs and their consequences, a business requires a highly functional supply chain with a systematic approach to managing inventory.

You can prevent stock out by –

1. Update the Quantity of your item left, so that it can no longer be purchased by consumers
If you are sharing your inventory across multiple platforms then make sure to reorder and receive before you run out, to avoid losing revenue.
2. It’s essential to keep an accurate inventory count, for reordering and to prevent stock out.

2. Avoid stock overflow

Keeping the appropriate amount of stock on hand is a delicate process. This is the only way to avoid overflow and stock out.

If you have a limited amount, you run the risk of disappointing your customers, losing customers to your competitors. Many customers turn to your competitor instead of waiting for a product to be in stock again. So allow your online customer to order what they want and when they want. Setting Right Shipping Strategy also helps a lot for Online Store sales.
Many customers are also willing to pay higher prices for same-day shipping, overnight shipping, or get their product as quickly as possible.

On the other hand, if you have excess stock, the risk of having dead stock that will eventually require liquidation. An overflow of stock not only costs you in revenue but it also takes a maintenance cost to store that product for example warehouse rent, insurance, security, and labor costs, etc.

It is difficult to get rid of dead stock. After all, you don’t want to sell with a big discount, bundling it with other products, or just donate it. As you will end up losing money no matter which option you choose, so it’s important to order stock in the right amount.

Calculating the right amount of product inventory requires you to estimate future needs by talking to your customers via a poll or a surveyor’s past data. Once you are done with analyzing demand, you can order based on that.

3. Conduct physical counts regularly / Regular Auditing

Tracking stock levels using an inventory system is all well and good, but also you need to do physical inventory counts. As sometimes the numbers of stock you have on screen may not match up to what’s actually in the store. To avoid errors, physically count your stock regularly.

You can do this by counting all your inventory or by regular cycle counting — i.e. the process of partially counting stock on a continuous basis. You can also choose to do both.

4. Reducing Human Error

You should reduce human error as much as possible. Anything that makes things easier and quicker for the user is essential – Reduce average order processing time to a minimum. Also, you can provide a live chat option on your website to provide better customer support.

Conclusion

Anyone who’s ever been stuck on inventory duty knows how time-consuming and stressful it can be to monitor the numbers and react in time. But if you are running your business with MoreCustomersApp, product inventory management is already built-in.

It eliminates the need for manual examining and reporting since you can simply check the available stock of your products within the app. Also, the number of stock available in your warehouse is updated automatically when your customers buy that product.