E-commerce Planning and Inventory Management
In the Last 15 years or so, E commerce is perhaps the
fastest growing industry that has taken the world by a storm and is expected to
reach 1.5 trillion US$ by the end of the year after an YOY growth of about
20.1%. This has become possible because after a successful stint in the
developed countries, it is the developing countries today that provide a huge
potential for the growth and adoption of E commerce and Mcommerce with
Asia-Pacific overtaking North America in the total revenue generated. But today
while the industry is growing at a breakneck speed, its attractiveness has led
it to become highly competitive, which is why most of the companies are trying
to differentiate by optimizing their operations and business models. As in any
competitive landscape, the only way to cut yourself apart is by giving the best
deals to your customers without compromising on your service. To make this
possible without compromising on your margins, it is extremely important to
look at the costs involved and optimize your resources. And given that SCM
related activities account for approximately 75% of the operational costs,
Demand planning, forecasting and Inventory management has become one of the
crucial deciding factors for an e commerce success.
Let us look at the best practices in e commerce inventory
management:
Stay
organized. Staying organized is one of the basic concept of
inventory management. Know what you have and where to find it."Use the
obvious," says Katie Hughes who sells Slip On Dancers, an accessory that
turns running shoes into dancing shoes. "Lay out inventory in your storage
area in a way that is visually easy to queue how many you have of an
item." If you have more inventory than you can easily gauge by eye, you
may need a technology-enabled solution.
Never be
out of stock. Make sure you have enough stock of the items
which your website says it is available. "For customers who receive an
'out of stock' notice on a page, it's a terrible disappointment,"
Colegrove says. "If you're going to carry a product on your website make
sure you never run out of it."Jason Haeger, founder of the AJ Coffee
Company, says a physical count of the inventory on a regular basis is one way
to keep tabs on quantities. He usually recommends a count once a week by the
same person."Have just one person in charge of inventory count and product
ordering," Haeger says." If the business is just one person, set
aside scheduled time for this task. It will seem tedious and feel like a waste
of time, but it should be done as an essential part of risk management for the
business' bottom line."
Select a
tailor-made system. When
it comes to managing sales and inventory, your business might only be as good
as the software you're running. "When selecting a shopping cart for your
online business, look for a system that integrates with industry standard
software for inventory management, bookkeeping and other services,"
Colegrove says. "As your business grows and your e-commerce needs change,
this will allow you to move to a new shopping cart solution while minimizing
impact to your business operations."
Running a successful commerce site is a job for an
entrepreneur who knows what to sell and how to manage sales. Being able to
organize the inventory and keep track of what's in stock and what's not,
reduces the chances of having excessive back stock or disappointing customers.
In order to increase the sales and profitability, there are multiple
software solutions available that are designed to cater to the e commerce
market.
Resources:
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