4 Tips to Better Manage Inventory for E-Commerce

Inventory management is one of the greatest challenges for businesses that have to keep tangible products on hand. Stores that have physical locations do have the benefit of being able to monitor the flow of customers in and out of stores.

E-commerce stores, however, face the even greater challenge of maintaining the right amount of inventory within their store. They have to avoid tying up too much of their capital in excess inventory, yet also have enough on hand so they don’t run out of the product and lose out on sales.

Check out these four tips for effectively managing your inventory.

1. Research and analyze. Unless you have a brand new company, you probably have enough data on hand to be able to forecast sales. While this method may not be perfect, it’s a good indication of what your future sales will be. Look at past records and analyze what products performed well (and which didn’t) and how much product you sold. If possible, analyze product sales over a period of years to determine if there are any trends.  Also take into consideration the amount of space you have and the amount of space those products will take, the shelf life of the product and the time it would take to deliver a new product.

2. Organize your warehouse. Create a system for organizing your warehouse and use inventory labels on products and shelves to make sure the system is easy to maintain. Inventory labels will any doubt about where products should go.

3. Work hand-in-hand with marketing. Make sure that you have plenty of stock in advance of any promotions set up by your marketing department. Work with marketing to plan in advance for specials and promotions so you have additional stock on hand to accommodate for an increase in sales.

4. Keep accurate stocking information. It’s important to accurately record the stocking data and update product pages when you’re backordered on a specific product. Nothing is more frustrating for customers than ordering a product and later finding out that it’s out of stock. Not only do you risk aggravating the customer but you also risk losing future sales.