E-Commerce Inventory Challenges and Solutions

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E-Commerce Inventory Challenges and Solutions
Delivering products on time is an essential part
of an eCommerce business. To deliver products at
the right time, the products should also leave
the warehouse on time. A warehouse has hundreds
of thousands of products lying there. If not well
managed, it would be nothing but chaos. For an
eCommerce business to survive in this competitive
market, it is extremely important to offer max
customer satisfaction at each and every point in
the customer journey. So, if your inventory
management is messed up, its effect would be seen
at all stages. To make it easier, we have
explained inventory and inventory
management. What is Inventory? Inventory means
raw materials and/or finished goods a company
sells or uses in producing goods. Basically, the
accountants use information about the stocks to
determine the correct balance sheet valuation.
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What is Inventory Management? Inventory
management helps companies keep track of the
present stock and what requires restocking. The
inventory is tracked from purchase to sales of
goods. Inventory management aims to identify and
react to trends by managing the stocks
accordingly. This helps in fulfilling customers
orders without going out of stock. Once the
inventory is sold, it becomes revenue, but till
then, it holds a lot of money. So, if you
overstock inventories, it reduces cash flow. So,
inventory management is essential for a
businesss health. Proper inventory management
can save a business money, improve cash flow, and
help in amplifying the customer
experience. Inventory Management
Challenges E-commerce store owners usually face a
lot of challenges in inventory management. Here
are some of them. 1. Managing Multiple Channels
Warehouses Manually As an ecommerce store
owner, you might have a single channel for sales
and a single warehouse to store all the
inventories during the initial stage of business.
You might use pen and paper or spreadsheets to
manage the stocks, the ins and outs of products,
and everything else. As the time passes, to
expand your business, you would probably increase
sales channels to increase the sales. And when
your sales increase, you would require more
warehouses to meet the demand. If you have orders
coming in from multiple channels and products
lying in multiple warehouses daily, it will be
difficult to manage. How many spreadsheets can
you handle at a time? Once the business scales,
manually handling sales channels and warehouses
is not an option. It creates confusion and lacks
clarity. It can mess up your whole supply chain.
Moreover, it can also lead to an unsatisfactory
customer experience, which can quickly drop sales.
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Inventory Management!
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• Overselling and Overstocking Inventory
• Overselling and overstocking the inventory are
  the two major challenges faced by ecommerce
  store owners. As they are handling the inventory
  manually, keeping track of these two is
  difficult.
• When handling all the stats manually, it is hard
  to keep track of orders coming in from different
  channels. The chances of overselling the product
  increase. No customer likes to hear you are out
  of stock after they have ordered the product.
  Such a situation impacts the customer
  experience.
• On the other hand, overstocking the product to
  save yourself from going out of stock in case
  you oversell the product is not a good practice
  either. Sometimes you might end up not selling
  most of them. And if the products have a shorter
  shelf life, they can go bad soon.
• How can you decide how much product you would
  sell in the upcoming sale or on festive days
  when sales are usually higher? With no proper
  technology, businesses usually get trapped in
  these two problems.
• Lacking Data Visibility
• Spreadsheets lack clarity on data. It is
  difficult to visualize what products need faster
  restocking and which need immediate action (if
  they have an expiration date). Even when
  handling inventory manually, if you wish to know
  the product quantities, you have to calculate
  the sheet every time you wish to know the
  numbers.
• If you have multiple warehouses at different
  locations, it gets even more difficult to
  visualize data. When you do not have clarity on
  actual data, it also impacts future strategies.
• For instance, you would be unable to maintain
  your inventory based on the new ongoing trend.
  Also, getting the raw material or the product
  from vendors takes a certain time to deliver.
  Some might send the product in three days, while
  others take six. So, if you want to restock the
  materials or products, it will take a few days to
  reach you. This would impact your delivery
  process to your end customers.
• So, having numbers in hand is not enough. You
  need proper comparisons and insights to smoothen
  your inventory management, which is lacking when
  handling data manually.

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• Difficulty in Accessing the Inventory
• You would be selling numerous types of products.
  If you do not categorize them wisely, finding
  any one product would not be less than a
  challenge.
• For example, if you sell apparel in different
  sizes. If you do not categorize different
  products with different sizes while packing the
  order, it will consume a lot of your time in
  finding the right size, or you might not find the
  products at all. This would surely delay the
  delivery process.
• Unsellable Product
• If the product is not in good condition or is a
  food item or medicine, you cannot sell them if
  they have reached their expiry date. Some
  products also get affected by weather, making
  them unusable.
• All this stock can cause a loss to a company. It
  is extremely important to track product expiry
  date (if applicable), product reactivity towards
  weather, and physical state (when dealing with
  fragile goods).
• Mostly, when handling inventories manually, it
  gets difficult to keep track of such small
  things. These small things turn out to be a huge
  factor when the number of spoiled products
  increases causing loss.
• Dead Stock
• Its a fast world, and fashion and interest
  change even faster. Everyone wants the latest or
  trending products. As the fashion or trend
  changes, no one will buy the old products. And
  to keep up with competitors, you might have to
  discontinue selling the old products and update
  your stocks with the new ones.
• Thus, the old products lying in your warehouse
  would be a deadstock. It is counted as a
  deadstock if you cannot sell a product for over
  12 months. Understanding the latest trend and
  making smarter decisions to empty the available
  stocks is important.
• You require a wiser understanding of the upcoming
  trends and what you should do to clear your
  stocks before the new trend strikes. You require
  a proper inventory management tool that reflects
  all this data, or it is impossible to figure out
  all these stats manually.

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• Lack of Internal Communication
• When a staff is working in an organization where
  inventory number changes constantly, it is
  important to have all the employees on the same
  page. The workflow should be clearly stated and
  executed.
• Usually, businesses face this issue where one of
  their employees follows one way of managing the
  inventory while the other follows some other way.
• This difference in working style can mess up with
  the data, and as a result, you might be able to
  deliver the product on time, or the situations
  like spoilage or deadstock increase. Thus, a
  lack of internal communication can disturb the
  whole cycle of inventory management.
• Inadequate Technology
• Handling multiple warehouses and sales channels
  would cause many problems. Lack of technology
  can disrupt your shipping cycle, risks product
  spoilage, and incur a loss to a company.
• If you cannot provide adequate service to your
  customers on time, it means unsatisfactory
  customers. Unhappy customers can be a dent in
  your companys image. This factor directly
  impacts sales numbers.
• Inventory Management Solutions
• A solution to all the above challenges is
  inventory management software. It helps in
  streamlining the whole process and gives accurate
  inventory numbers. Some points show how you can
  overcome the above challenges with good inventory
  management software.
• Centralized Tracking System
• The inventory management software has this
  feature, where it tracks the inventory in
  real-time. When a particular product reaches a
  certain quantity, it automatically reorders it
  or alerts the admin about the same. This would
  save you from going out of stock and at the same
  time save your time of manually checking each
  inventory and then ordering.
• Future Forecasts

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• you analyze all the data manually, it is
  extremely difficult to make such predictions. But
  with software, in no time you will have the
  predicted quantity of products that you can
  stock before the festive season starts!
• Regular Stock Audits
• Processes like daily stock counting become easier
  with digital data. With this software,
  conducting daily audits becomes easy. It ensures
  you do not overstock any product to prevent your
  business from blocking the cash flow. The
  financial and the stock data it provides are
  accurate and prevent a company from overstocking
  and overselling the products. It reduces the
  mismanagement that was earlier seen while
  handling all operations manually.
• Managing Product Details
• Naming the production a certain way can
  significantly impact its sales. Using
  SEO-friendly keywords can bring you more traffic,
  which means more sales.
• Updating all the products names can look like a
  tedious task. But, if you use a Shopify bulk
  editor for your Shopify store, it can update
  names in seconds. It also helps manage prices,
  names, or any other details of products. All you
  need to do is to integrate such a plugin within
  your Shopify store or add this as a feature in
  your inventory management software.
• Preventive Measures
• Prevention is better than cure. Preventive
  measures for perishable stock and fragile
  products can help you sell them before they reach
  an unsellable state.
• As one of the preventive measures, you can
  regularly check and maintain the products in
  inventory, if required. Keep the list of such
  products, their location in your warehouse,
  cost, and quantity, so that it is easier to
  monitor their shelf life and prevent waste.
• Track Goods from Suppliers
• If you buy raw materials and/or finished products
  from the suppliers, it is important to check the
  quality, quantity, and time of the goods
  received. The received quantity is not the same
  as the expected quantity. The goods you receive
  might be faulty, damaged, or defective.
• Track whether the supplier sends the goods on
  time, or else they can disrupt the whole supply
  chain. The software helps keep track of all the
  goods. It highlights the suppliers name when
  the delivery is late so you can communicate with
  them and fix your supply

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• chain. You can ask your suppliers to have a fixed
  delivery period in order to avoid confusions.
• Reduces Human Error
• All the products in or out of the warehouse are
  scanned with a barcode scanner. The quantity of
  the scanned product is instantly updated in the
  software. It nullifies human error and the
  chances of data manipulation. This can be a major
  advantage for a business as it can save a
  business from huge losses.
• Unified Dashboard
• Early you had to manage numerous spreadsheets to
  maintain different kinds of data. Having data in
  different sheets lacks clarity. It is harder to
  understand and make decisions when data is
  discrete. But this software has a dashboard
  loaded with all the important information on one
  page. It becomes easier to visualize the status.
• Wrapping Up
• The right inventory management software can help
  you streamline your inventory. You can also add
  up small plugins like Shopify bulk editor to make
  software for resourcefulness. For a business,
  inventory holds up a lot of cash until the
  products are sold, it is important to manage and
  maintain them. As your business grows, you will
  require more and more warehouses. A company can
  incur a huge loss if the inventory is not
  managed properly, a company can incur a huge
  loss. But, todays inventory management software
  is loaded with many useful features.
  Additionally, this software is AI-driven and
  helpful in predicting inventory.

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