E-commerce has created a lot of buzz in the realm of IT and seeing its profit and growth, many companies have adopted this trend. You can hire Magento developer India to make an eye-catching and compelling e-commerce store, but at the same time, you need to manage your stuff wisely to make your e-commerce business profitable. Here comes inventory management which will make your customers happy and contented if you make proper strategies and planning.
What is inventory management?
Inventory management means your products are ready to dispatch as soon as your order comes in. Though it seems easy, still, it is a little bit of intricate because a lot of things are involved in inventory management. Good inventory management will not only ensure that you have necessary items in the stock but also there is a contingency or emergency plan which you will follow when things don’t work as planned.
Now, we are mentioning some money saving inventory management techniques that you should follow if you want to establish your e-commerce business firmly in this world.
- Make a plan as per the demand: If you are in the business for some time, then you can easily assume the demand for your products. You can evaluate your past sales record and the current trend to estimate how much inventory you should have in your stock. Based on your marketing strategies, effort, and average conversion rates, you can estimate the demand for your product. All this information will help you to know how much inventory you should keep in your stock for a given time period.
- Set minimum stock levels (MLS): You need to set your minimum stock levels wisely to make your business profitable. This means the minimum amount of product that you should keep in your hand all the time. When your inventory falls below this number, you need to place the order more. You can set this number based on the demand and how quickly a product is sold.
- Maintain the correct inventory quality: Once you know your MLS, now you need to maintain the correct inventory quality. If you a centralized system, when your stock falls below MLS, it will notify you and you can immediately place the order with suppliers.
- Prioritize your product: If you want to uplift your e-commerce business profit, you should prioritize your product by using ABC analysis.
–> “A” category items: These products are the most valuable for your business and sell very quickly.
–> “B” category products: These products don’t sell frequently and cost more to hold. So, mark them as average important products.
–> “C” category items: These products use very rarely, so make them as” the least important products”
- Make an emergency or alternative: Always make a contingency plan for your business. Certain questions you should ask before planning.
–> What if I miscalculate my inventory stuff?
–> What if my sales volume increases and I run out of stock?
–> What if I run out of room for my products in my warehouse?
–> What if my manufacturers don’t want to manufacture or discontinue my products?
–> What if there is any cash flow issue?
By analysing all these situations, you can make an alternative plan which will help you to combat all these problems.
6. Go for Centralize inventory management system: It won’t be an easy job to maintain everything manually by using pen and paper. So, this is the time that you should consider a cloud-based inventory management system which will make your job simpler and comfortable. If you don’t want to lose the competition, opt for a centralized inventory system.
- Communicate with your customers and suppliers: If you don’t want to tarnish your reputation, never over promise or under-deliver. Make honest communication with both your customers and suppliers. If a product is recalled, notify your customers immediately. On the other hand, if your suppliers can’t deliver the product or facing any manufacturing issue, make sure you are the first one to know this. This will help you to adjust your inventory accordingly your available stocks.
- Audit your system: You should audit your system at an interval basis in making sure everything is working in a hassle-free way. These days, demand changes with the trends and occasions, so you need to manage your inventory as per the growing trends and demands.
- Apply the FIFO method: If you want to save your money, then you need to implement effective inventory management strategies. So, consider FIFO (First in First out) method while dispatching your stock. You should sell your oldest stock first as compared to the newer one. This method is very useful if you are dealing with perishable items.
- Consider Dropshipping: Dropshipping is a great idea if you want to save money for your e-commerce business. In dropshipping, you don’t need to carry inventory yourself rather your manufacturers hold and deliver said inventory to you. Thus, dropshipping extirpates the costs that are associated with holding and storing inventory.
These are some money saving inventory management techniques for e-commerce business.
HorizonCore has an astounding portfolio in the field of e-commerce sector. If you want to develop a compelling and effective online store for your business, hire Magento developer India from this company. You can check their work and services by visiting their website.
So, don’t waste any time, just contact HorizonCore for the best e-commerce site.
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