A lot of entrepreneurs who own a small ecommerce venture dream of scaling it and making more money. However, they might not realize that a sudden increase in their product’s demand might lead to various problems. Managing inventory can become a nightmare if you are not prepared.
There are certain steps that you can take and avoid the upcoming problems with the inventory. And here are some tips that will help you manage the situation.
Also Read: Will 5G WAN Unlock Business Opportunities for You?
Tip #1 – Reconsider the Business Model
Some entrepreneurs ought to reconsider their business model if there is an opportunity for that. Dropshipping is a great example of how running an ecommerce venture becomes easier when you eliminate the problems of managing warehouse and inventory.
You can look to test things out using Printify and creating a print on demand store that sells custom-made merchandise like t-shirts, hoodies, phone cases, or calendars.
Shipping is in the hands of the suppliers and you can shift your focus toward marketing and other matters.
And while there are brands that take care of product manufacturing and everything themselves, giving a dropshipping business model a try is still worth consideration. It will help to reevaluate your current business and might be enough to persuade you to shift entirely toward dropshipping.
Tip #2 – Build Strong Relationships with Vendors
Finding a reliable supplier is hard. However, when you establish a great relationship with one or two, make sure that they stay that way. Otherwise, it might lead to various communication problems because the supplier no longer prioritizes you.
And when you are not able to receive the product in time or delivery is late and customers have to wait, every wasted day is causing you money losses and negative reputation from customers who are unhappy with the services.
It may also be worth looking to approach new suppliers without cancelling your partnership with the current suppliers. At the end of the day, if you are going to expand, the current network of suppliers might not be enough to fulfill your demand.
Tip #3 – Forecast the Demand
Forecasting the demand perfectly is more or less impossible because you cannot know when a huge spike of sales is going to appear. But you should still have enough information to see a bigger picture and figure out the time when there will be an increase in the demand.
Forecasting demand is not about preparing for when you might run out of products. If there are periods when you are not selling as much, knowing this will help with avoiding losses by manufacturing or ordering too many products.
Those who have been in the industry for a long time and keep up with the trends have an advantage due to more experience. But even those who are still in the early stages of ecommerce should do as much as they can to predict the demand and prepare for time when you will need to sell more products.
Tip #4 – Automate the Process
There are a lot of tools that allow you to automate the process and manage inventory more efficiently. Not only will you boost profits, but also have a chance to get rid of manual work that can become a bit too much, especially when it is a peak period and everyone working in the warehouse has to be moving without any breaks.
Inventory management software is one of the trends of ecommerce that will continue to play a prominent role in shaping up the industry. When there is an opportunity to ensure that you are not overstocked or understocked, it would be unwise to not take it.
The Xero inventory management system helps to sync inventory data across every channel so that you can manage and collects real-time inventory data. It can be used for various growth opportunities, as it becomes a real life-saver for most entrepreneurs.
Tip #5 – Prepare for Seasonality
There are some ecommerce stores that thrive when a particular season hits. And it does not necessarily have to be holidays like Christmas. Some sportswear will sell better in the summer and some in the winter.
Whatever the case may be, if you notice that there are clear ups during particular times of the year, prepare for them. When the weeks are slow, keep your inventory to a minimum. And when the time is about to come, stock up and be ready.
When the peak season is about to end, look to create a special offer campaign and sell off the remaining products to avoid dead inventory.
Tip #6 – Hire More Employees
When you think that you are still lacking preparation and will not be able to handle the pressure and the number of orders, hiring extra staff is the way to go. More employees are quite common during holiday seasons when shoppers are willing to spend more. But the time frame does not have to be defined. When you are struggling, get help and lessen the burden on those who have already been working in the warehouse.
