Out of stock.
Three of the most-dreaded words for online shoppers and merchants alike!
Annually, online retailers lose revenue worth over $1.75 trillion as a result of not efficiently managing their inventory. That means a huge opportunity to boost sales for your company by just using the right eCommerce stock control strategies.
Fortunately, with some proper eCommerce inventory management, your business can indeed effectively manage it’s stock and keep your customers happy and bottom line healthy. Here’s how to do it!
How to Avoid Overselling
There’s really no “one size fits all” approach when it comes to proper eCommerce stock control and choosing the right eCommerce inventory management system. That means it’s important to experiment with what works best for you and to use various strategies to figure out what works for your business.
Here are eight ways to prevent overselling using some time-tested eCommerce inventory management methods!
1. Set A Standard Level of Stock
This simply means the minimum number of products that must be available in your stock at all times.
With this eCommerce inventory management strategy, you’re able to restock your inventory once the number of available products falls below your set standard. Although it takes time to master this, it can save your company a lot of time and money in the long run!
By using this inventory management strategy for your eCommerce business, you’ll be able to avoid inventory overselling and, in turn, minimize the number of customers impacted by not having the products they want in stock. For maximum effectiveness, your stock alerts should be based mainly on the frequency of your customers’ orders, especially for high-demand items.
2. Utilize the FIFO Method
FIFO means “first in, first out.”
In other words, the oldest inventory, being the first in, should be sold out first before the newer stock is offered to customers. This eCommerce stock control strategy is especially important to retailers who sell perishable goods. This way, you don’t end up saddled with expired products.
Even when you sell products that aren’t perishable, having them sit for a long time on the shelves leaves them worn-out and, should your supplier change the packaging of their products, the old stock begins to look obsolete - meaning it’s especially important to sell the older stock first!
3. Maintain Back-Up Plans
As a business owner, you should always have back-up plans, especially when it has to do with your eCommerce inventory management system. You should plan for contingencies so that, should you accidentally oversell, you’ll still be prepared for the worst.
What happens when there’s an unexpected spike in sales? Or if you experience a reduced cash flow and you’re unable to order more stock? What if you only have limited space to store additional products?
Having a back-up plan will save you a lot of headaches - and the potential loss of customers!
4. Carry Out Regular Inventory Audits
Carrying out regular inventory audits is crucial to avoid eCommerce overselling. There are several methods to do this, including:
- Physical inventory audits once every week, month, quarter or year
- Spot checking certain products that sell frequently
- Doing special inventory counts on products prone to inventory errors in the past
5. Utilize Inventory Management Software
Gone are the days when business owners have to depend only on spreadsheets to keep track of their stock. What if someone mistakenly deleted the edits you made on the spreadsheets?
This is where the use of eCommerce inventory management software comes in.
Just a few to keep in mind include:
All of these and more can help you manage your eCommerce inventory much more cost-effectively and efficiently!
6. Maintain Safety Stock
This strategy is all about taking precautionary measures – buying more stock than you need, but for a good reason!
Maintaining a safety stock can act as an insurance policy if overselling does occur. If a certain item becomes hot and sells out fast, for example, a safety stock can prevent it from becoming totally out of stock until you formally reorder or manufacture it again.
This method is especially useful if your company offers non-perishable goods. Notably, this safety stock shouldn’t be listed as part of the available stock.
The only downside to this strategy is that you’ll need additional space where the extra products will be stored. If you have a larger warehouse though, then you have nothing to worry about!
7. Take Good Care of Your Warehouse
You don’t want a situation where you actually have the goods ordered but because your warehouse isn’t in good condition, they’ve been badly damaged. For example, you might have 20 items left, but 10 are badly damaged and not suitable to be shipped to your customers. That means lost profit is sitting right there on your shelves!
In order to avoid this scenario, always take good care of your warehouse. Check for water leaks, mold buildup, broken shelves and anything else that poses a threat to your inventory.
8. Accurately Predict Product Demand
Finally, this eCommerce inventory management strategy entails being able to accurately predict demand for products. Although this isn’t easy, it’s doable - and important!
Some of the factors that should help you to accurately forecast the demand for certain products and maintain an effective inventory management for your eCommerce site include:
- Prevailing economic conditions
- Yearly business growth
- Sales made the previous year in the same period
- Market trends regarding product popularity
- How demand for your competitor’s products stacks up
This unique strategy will help you have enough products in your inventory, all year-round!
Prevent Overselling with eCommerce Inventory Management
Proper inventory management for your eCommerce site is crucial for the success of your online business. Using the right eCommerce stock control strategies can help your maintain a healthy inventory turnover and keep your shelves stocked with just the right amount of product.
Try using these strategies to prevent overselling - and seeing that dreaded “out of stock” message!
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