eCommerce inventory management: What, why, and how?

 The eCommerce industry is growing at an astounding pace. With most people opting for eCommerce as their preferred way to shop, catering to demand accurately can be a challenge. Maintaining your product inventory and ensuring you equip your warehouses with the right products can seem cumbersome. Ecommerce inventory management is the key solution to this problem.

Ecommerce inventory management software refers to the process of streamlining inventory across channels to track quantity, pricing, product mix, and more across locations. Today, eCommerce operators cater to customers globally and rely on in-store inventory, fulfillment centers, third-party warehouses, and more to cater to the demand. Planning your demand allows you to keep an eye on your inventory and its utilization.

Why is inventory planning in eCommerce crucial?

As mentioned, eCommerce brands cater to a broader audience, making inventory planning essential. It ensures you have enough products to cater to customer demand, minimizing lead times. A few benefits of inventory planning for eCommerce:

• Product visibility

Efficient eCommerce inventory management ensures visibility across the supply chain, allowing you to track each product from inventory to delivery. Transparency in the supply chain allows you to forecast your inventory purchases on time and ensure sufficient stock. 

• Avoid spoilage & deadstock

Spoilage mainly occurs with short shelf-life products. At the same time, deadstock refers to unsold, often seasonal products that sit in inventory because they've become irrelevant or out of season. Effective eCommerce inventory management helps you equip your warehouses better and avoid wastage for both of these reasons.

• Better product allocation

Not all inventories require the same amount of product. Based on your forecasted demand for each inventory, demand planning lets you accurately allocate products to each inventory. This ensures ample stock to cater to demand but saves you from inventory wastage.

• Improve cash flow

Inventory planning aids cash flow in more ways than one. Accurate planning ensures you don't stock out or lose sales, or on the flip side, don't overstock. All this adds up to savings on warehousing costs, inventory wastage, excess safety stock, and more. 

• Positive buying experience

By automating inventory workflows, you always have accurate inventory counts and are ready to cater to your customers' orders. This saves sales and ensures a smooth and seamless buying experience for your customer.

Common challenges of eCommerce inventory management

Maintaining accurate inventory can be cumbersome. Monitoring and tracking every order at every step is tricky. Whether you are a small brand selling via a big eCommerce platform, a new eCommerce brand, or a big ERP using an eCommerce company, inventory management has its own set of challenges. Companies often face a few common challenges in eCommerce inventory management, as given below.

• Overstocking or stockouts

A weak grip on your inventory means never being prepared with the right amount of product on hand. Inefficient inventory management in eCommerce can lead to stockout situations, costing you sales and often invaluable customer loyalty On the other hand, excessive inventory can mean wastage, deadstock, or unnecessary warehousing costs. 

• Overselling

Another common challenge for eCommerce inventory management is overselling. Customers place orders for products that are already out of stock but not updated on the platform. Such scenarios lead to long lead times and often refunds due to lack of inventory. This can result in a negative customer experience, costing you customers and your reputation as a brand.

• Meet growing demand as you scale

As you grow, you increase your selling points to various channels, and it can often be tricky to manage multiple orders manually, not to mention the inevitable human error in doing so. Disorganized inventory management in eCommerce can lead you to forecast your inventory inaccurately, either falling short or causing wastage.

• Lack of visibility

In the contest to increase sales, you often sell your products via multiple channels and store your inventory in warehouses across various locations. It can be hard to manage orders coming from each channel, the inventory for each warehouse, and the relationship between them. An efficient inventory management solution for eCommerce is quintessential to managing visibility across the complete system. 

• Lost sales

When your inventory audit shows more products than your warehouse contains, it is called lost sales. This miscalculation can lead to back-ordered purchases or refunds, affecting your reputation in the long run. 

• Lack of data insights

One of the biggest drawbacks of eCommerce inventory management is the lack of data insights of your products over time. When you don't know how your demand has been changing over time, you won't be able to decide how to replenish your inventory perfectly. This affects your decision-making processes, leading to ineffective management.

How to optimize your inventory with TransImpact software?

Managing your inventory can prove to be a complex task. The best-known way to do that is to use efficient inventory planning software. One of the best eCommerce inventory management solutions in the market is provided by TransImpact. It allows you to plan your inventory with up to 99% accuracy and manage thousands of SKUs efficiently.

TransImpact's inventory planning software helps you operate on minimal inventory by reducing inventory by up to 30%, saving you unnecessary costs. You can plan and optimize your inventory based on projected events and ensure ample stock at all times. You can reduce the chances of a stockout by 85%, saving sales. Similarly, it helps you maintain minimum safety stock, avoid overstocking, and still be prepared to cater to shifting demand. 

TransImpact's point-of-sales forecasting for eCommerce inventory management lets you manage orders across all your channels and forecast end sales from each channel accurately. You can track the journey of each product from inventory to delivery with optimal visibility. This also helps you avoid lost sales. Accurate data insights mean informed decision-making at every step from raw material purchases to product operations. 

TransImpact inventory planning tool is the one-stop solution for your inventory optimization needs. To learn more about it, book a free demo with us.Get in touch with us and let’s get started.