How much do you lose because of stock outs 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abandoned your online store because the pair of clothes they want is out of stock or if you’ve ever been forced to sell outdated products, there is a chance that it’s because of poor stock management. It is not just an internal process to a kept record of your stock but its direct effects revenue and your relationship with a customer.
There are following techniques which help you to optimize your stock
The goal of every business is to sell the stock in the least possible time, to accomplishing this goal it 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 customer want to buy it. When customer didn’t find product they want, they’ll substitute with the similar product instead of waiting for product to be in stock.
Unfortunately, the damage occurs because of Stock out is beyond the lost sale. Too many out of stocks can ruin the brand trust and increase customer service costs and you harm customer relationships. Also, make sure your stock and staff are ready so that you won’t fail to deliver the product or else lot of efforts and resources get wasted. In order to avoid stock-outs and their consequences, business requires a highly functional supply chain with a systematic approach to managing inventory.
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 accurate inventory count, for reordering and to prevent stock out.
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.
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 big discount, bundling it with other products or just donate it. As you will end up with losing money no matter which option you choose, so it’s important to order stock in the right amount.
Calculating the right amount of inventory requires you to estimate future needs by talking to your customers via a poll or a surveyor past data. Once you are done with analyzing demand, you can order based on that.
Tracking stock levels using 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 a stock on a continuous basis. You can also choose to do both.
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 on your website to provide better customer support.
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, inventory management is already built in.
It eliminates the need for manual examining and reporting since you can simply check 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.