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How To Manage And Keep Track Of Your Online Business’s Inventory

When you sell things in your online store, it’s easy to let inventory management slide since you don’t have to look at your stock. But if you know the basics of managing your inventory, you can avoid problems that can cost a lot of money and make your store rush to fill orders. With a few key parts and inventory management software, you’ll be well on setting up an inventory system that runs smoothly.

Estimating Online Store Inventory

How To Manage And Keep Track Of Your Online Businesss Inventory
How To Manage And Keep Track Of Your Online Business’s Inventory

No matter how long you’ve been in business or how new your online store is, you need to come up with decent numbers when placing an order of items for stock. Since you’re not a seer, you can’t know for sure how many products sell in advance, so you make a rough estimate. You can use sales from the last three to six months or longer to make your estimate.

It’s Easier To Make Predictions When You Use:

  • Rate of growth right now
  • Previous year sales
  • Market trends
  • Contracts or subscriptions already in place
  • Advertising that’s coming

The key to ordering the right inventory is not to order too much or too little. If you order too many items, the ones that don’t sell might sit in a warehouse and cost you money that could be better spent elsewhere. If you order too few items, orders might be canceled because you don’t have enough. This could hurt the reputation of your store. With good inventory management in place, making better predictions over time should get easier.

Utilizing The Par Inventory Method

Par levels are an important part of inventory management. They tell you how much of each type of product you need in stock. Par levels change depending on how a small amount of inventory you order but how much of that sell at any particular time. It would be best to establish a system that automatically keeps track of this information.

Think how difficult it could be to maintain track of many inventory items by hand every month. If you don’t keep track of par levels, you might run out of a popular product, which could make customers angry and make them promise to never buy online with you again. To escape this, create a point to check par levels every several months so you can act quickly to add more stock before a sudden increase in sales.

Follow The Rule “First-In, First-Out”

As you keep ordering more items to add to your stock, your order items may end up in the back of the warehouse. This can cause products to go bad or lose customer value, leading to lost sales. The first-in, first-out (FIFO) rule is a simple way to ensure that the items ordered first are sold before the items ordered more recently. This is a rule that many warehouses follow, but you should double your suppliers to make sure that the oldest items are moving out the gate first.

Plan For Problems With Inventory

Problems with your stock can sneak up on you. If you aren’t ready, it might be hard for you to fix these issues when they’re out of hand. Let’s say you put your money into a sure winner that doesn’t sell very well. How would you get rid of that inventory that’s not moving? What do you do when a provider runs out of goods or services during the holiday shopping season? Think about everything that could go wrong with your inventory and plan for each possible situation.

Sort Inventory According To Popularity

When you have items that don’t sell, it makes sense to stop keeping them in stock. This makes it vital to maintain track of items using stock-keeping units (SKUs). It also helps you figure out how to eliminate products that don’t sell very often, like by having a sale. On the other hand, ensure you have enough of your most popular items on hand, especially if you think customer demand will go up.

Think About Other Storage Options

Think about putting some of your products in regional hubs to get orders to your customers faster. You might be able to work out a storage deal with a national chain that has warehouse space. As you organize your warehouse, making sure that popular items are easy to get to can reduce the time it takes to pack and ship.

Audits On-Going

It’s a good idea to do inventory audits regularly using effective inventory management apps that can make a detailed report. You may think that one audit a year is enough, like many business owners. But doing audit reports every month or every three months can help you know more about how your inventory is doing.

Audit reports can also help with planning and figuring out how to handle risks. With real-time inventory management software like QuickBooks Online, you can always know exactly what is going on with your stock. What the better inventory software does:

  • Gives each item a barcode.
  • When a worker scans that QR code, noting that an item has been taken from a warehouse shelf, the inventory records are updated.
  • When you run out of a product, your website is updated immediately.
  • Offers tracking details during shipping, so customers know when to expect shipment.

Inventory software can also give you useful information about how your sales are going. In the same way, it can let you know when you are running low on a specific product.

Check Your Inventory Budget

It’s a good thought to collate your inventory numbers to your budget and make changes as needed. Maybe the prices of products you buy often have gone up or down, which could hurt your budget. Make sure your planned stock order won’t cost more than you can afford. When you look at your inventory and sales budget together, you may find that you need to move money from one category of products to another.

Manage The Costs Related To Your Inventory

Using a smart inventory control system is a good way to cut down on the costs of carrying your inventory, but there are other things you can do to keep costs in check. If you have results that you can’t market, you could ask your supplier if they will take them back.

Some sales offer big discounts on items that aren’t selling well. You could even hold markdown or receivership sales for product lines you plan to take out of your product catalog completely. Some smaller companies also find it expensive to donate products to nonprofits and take a tax deduction to offset losses.

You could also try to get better payment terms from your suppliers and lower shipping costs by setting up drop-shipping. This means manufacturers ship directly to your customers, saving your business money on processing fees.

Conclusion

Inventory management is an important part of any business. It doesn’t matter if you’re running a retail store, wholesaling items, or operating an online business, you need to be able to effectively manage your inventory. There are many software programs on the market that are designed to help you do this, but most of them are complex and can be difficult to use. Inventory management and tracking are easier than you think, and there are a variety of ways that you can manage your inventory. This blog is going to discuss some of the ways you can manage your inventory for your online business.

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