Manual inventory management may lead to overstocking, data entry mistakes, no real-time updates etc. Proper inventory management with automation is required if an e-commerce business wants to widen its sale channel, work with multiple vendors and manufacturers, manage warehouses at different locations in the country, etc. But, as the business grows, it becomes challenging to manage inventory manually. The best solution for this is to mark the products out of stock so that customers can get a clear picture of product availability.Ģ.Scalability issues: Manual inventory management is effortless in the early stages of e-commerce. This may affect your reputation adversely in the market. Immediately, on the other hand, there is a chance of overselling, i.e., allowing the customers to buy goods out of stock. You may overestimate the demand for a particular product, but the demand may decrease due to a change in shopping behaviour. Here are some of the challenges faced by an e-commerce industry with inventory management:ġ.Overstocking: In the e-commerce industry, if you do not have proper knowledge about your target customers, you will be able to pile up stock that is not in demand or outdated. Running short may lead to missing sales, whereas carrying too much stock may cost more capital.Ĭhallenges with inventory management in e-commerce Balance inventory: Balancing inventory and demand is the biggest priority of any e-commerce company.This helps to meet consumer demands and also avoids overstocking. Make appropriate forecast: Study the past purchase trends and, based on them, predict the future stocks.This will help you to deliver greater customer satisfaction. Use convenient storage: Keep goods at a place from where you can easily pack and post them to the customers.For example: Give offers such as buy two get one free. Knitting techniques: Use knitting techniques to get rid of overstock at a good price.So, it is good to keep a safety stock to meet unexpected demand and supply situations. Keep safety stock: Something unexpected may happen anytime.These could be products hosted in your warehouse, provided through a third-party logistics fulfilment centre (3PL), or housed in a separate business and purchased through dropshipping.īelow are some of the special aspects of inventory management for an e-commerce industry: Special aspects of inventory management for e-commerceĮcommerce inventory management is the act of measuring the amount, location, pricing, and mix of products available from your business. It prevents wastage and thus helps to streamline inventory. Thus, in simple words, we can say that it is a complete process of monitoring and handling inventory from raw materials to finished goods. Inventory management is a process businesses follow to manage the procurement of raw materials, storage of goods, warehousing, managing appropriate inventory levels and final selling of products in the market.
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