The eCommerce business setup is significantly different from the brick and mortar retail stores. However, there is a common factor that impacts their financial profits and loss, and that is inventory management. At times, eCommerce business organizations do not have a proper warehouse to keep and store their inventory, which significantly impacts their sales.
The United Arab Emirates is one of those countries that is seeing a spike in eCommerce business organizations. The setup is significantly beneficial for the consumers; however, it puts more stress on the business managers to keep track of inventory and manage it efficiently to maximize their profit, instead of committing accounting mistakes.
Factors Affecting Inventory Management
Here are the top factors that affect the inventory management of eCommerce businesses.
- Overselling stock
- Spoiled stock
- Dead inventory stock
- Ineffective supply chain management
- Lack of communication
Explore this article in detail to learn how you can boost the inventory management of your eCommerce business.
Top 8 Tips to Improve Inventory Management in Ecommerce
Inventory management is one of the basic responsibilities of any business to optimize its accounting procedure. Mistakes and issues in inventory management can disturb the accounts and add loss to the business account of the organization. Ensuring proper organization and management of inventory is crucial to enjoy higher profits.
Here are the top tips to improve inventory management of your eCommerce stores.
1. Use a Centralized System
The first and basic tip to improve inventory management of your eCommerce store is to use a centralized system. It is necessary to develop a daily log of the sales, purchases and products available to optimize your dealings. All of this requires expertise and professional skills. Therefore, most eCommerce stores acquire service of bookkeeping and accounting firms in Dubai and ensure to centralize their inventory management system that increases their profitability.
2. Develop a Contingency Plan
Managing a business can expose you to some of the best and worst scenarios. In the case of best scenarios, you can plan, prepare and deliver without much disturbance. However, the worst scenarios can cause irreparable loss. Therefore, you need to have a contingency plan to manage the good and bad days without much disturbance.
3. Manage Your Inventory Digitally
One of the most ignored aspects of eCommerce stores is managing the digital inventory on a regular basis. If you have displayed a hundred products on your portal, check the amount available by the end of the day. If some product is being displayed out of stock digitally, check your inventory and update the number online in case you have some left out stock.
4. Keep a Close Watch on Inventory Manually
Keep a close watch on your inventory manually is equally crucial and important. Check all the products and items available in your stock and ensure the fact that they are mentioned on your website. In addition to it, be sure to check the expiry date of the products or items, if any and remove them from your online store if you are not going to get new stock anytime soon.
5. Manage Out of Stock Items Carefully
Another important tip to effectively manage your eCommerce inventory is managing out of stock items carefully. You need to ensure that the product is in demand before ordering it again. You will only earn a loss by ordering an out of the stock product that is not in demand anymore.
6. Streamline Supplier and Consumer Communication
One of the most important tips for managing the inventory of your eCommerce store is to streamline supplier and consumer communication. At times, some products are more in demand as compared to others, due to which they are often out of stock. By streamlining the communication, you can restock and get popular items that will boost your sales and profitability.
7. Keep Your Warehouse Organized
Another important tip of managing your eCommerce inventory efficiently is to keep your warehouse organized. By keeping it organized, you will get a better idea about which products are in demand and which have lower sales. You can manage your orders accordingly and avoid the loss of purchasing huge stocks of products that are not in demand.
8. Pay Attention to Regular Record Keeping
Record keeping on a regular basis is crucial for the success and growth of any small or big business organization. It is all the more important for the eCommerce stores, as their profitability is linked to their inventories. Clearing older products and including new ones can save you from loss. You can hire professionals from operational bookkeeping firms and ensure to manage your books and accounting records efficiently.
Manage your inventories to boost profits!
Managing the inventory of retail and eCommerce stores is equally important to boost your sales and increase profitability. Ignoring the inventory is difficult for retail stores; however, it often earns a bit of loss to the eCommerce stores. So, if you lack the skills of managing the inventory, get professionals on board to keep a detailed track of all your sales, purchases, and available items and boost your profits.