If you’re looking to become a successful e-commerce entrepreneur, you’re in luck. The global e-commerce industry has grown at a record pace over the past 12 months, reaching an all-time high of $876 billion in the first quarter of 2021. While business is booming for e-commerce entrepreneurs and managers, that does not mean success is guaranteed.
E-commerce depends on sensitive global supply chains where speedy distribution and shipping are the most important factors to success. That’s why you need to know the ins and outs of e-commerce inventory management if you want to get ahead.
By knowing exactly how to manage inventory the right way, you can guarantee a leaner, more efficient, and more customer-friendly e-commerce operation. Read on to find the top tips for a winning inventory management strategy.
1. Choose a Warehousing Method
Your first step to success is always to review the different methods of warehousing and choose one that is right for you. There are many different ways to store your product in a warehouse, some of which will combine the storage and the distribution aspects of your inventory management process.
There is drop-shipping, which outsources these duties entirely to a third party. There is renting or buying a fulfilment centre, or a distribution centre. You can click here to learn the crucial differences between these types of warehousing and the benefits of each to your e-commerce business.
2. Start with FIFO E-Commerce Inventory Management
One of the key lessons on how to manage inventory is to have first-in, first-out (FIFO) as your baseline principle for all inventory. This is essentially a way of ensuring that your oldest stock is always the stock that is sold first.
It means storing and labelling your oldest stock in a way that makes it clear that those items should be shipped before any other ones in your warehouse. This can help you ensure that products are never wasted due to perishability, as well as making sure that you make effective use of every square inch of your warehouse.
3. Put Someone in Charge
Tracking e-commerce stock effectively is something that impacts every level of your company. That being said, it is crucial that you put someone in charge of overseeing the whole thing.
There should be at least one person in your operation who is accountable for your inventory management and who has this duty as their main job, if not their entire job. This will make the whole process much more effective.
4. Learn What Isn’t Selling Well
For a leaner inventory management system, always keep track of what is not selling well. You can even use inventory management software to see which of your products are just sitting on the shelves, taking up space, and costing you money.
When you know what is not selling well, you can adjust your inventory accordingly to make space for your more popular items. This simple principle can have a huge impact on your productivity.
Simple Solutions for Big Business Questions
Understanding the basics of e-commerce inventory management will help your business venture get off to the strongest possible start. For more tips on how to grow your business, we have got you covered. Make sure to consult our dedicated Business guides for the latest practical insights that you can really use.
