The Benefits of Using an Inventory Management System

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The Benefits of Using an Inventory Management System

Мнениеот Gabriel451 на Вто Ное 29, 2022 7:25 am

What's at the heart of any growing product-based e-commerce business? It's not your online presence or a compelling social media strategy - it's your inventory management system.

As you grow your e-commerce business by entering new sales channels and other markets, not only does your order volume increase, but so does the complexity of managing orders across multiple sales channels. If you're still managing your inventory manually, there will eventually come a point where this becomes unmanageable and out of control.

Manual inventory management brings with it a whole host of problems. From processing orders from each sales channel separately to performing regular manual inventory checks so you can adjust your inventory across all platforms, it all takes a significant amount of time. And that time could be better spent building your business. The time it takes to reconcile this information can also mean you don't have real-time visibility of inventory levels, delays in reordering when stock levels are low, and outages and lost sales as a result.

Not to mention the risk of human error leading to issues such as overselling, which can result in disappointed customers, wasted marketing budgets, reputational damage, and exclusion from certain marketplaces. Another potential risk is missing out on valuable sales by not automatically reactivating your listings when the product is back in stock.

The solution lies in implementing an inventory management system that does the hard work for you.

Automating this core area of your business offers key benefits. In this article, we'll explain the key benefits of automating your inventory management and the impact it can have on other areas of your business.

What is inventory management?

Inventory management is a critical part of your overall supply chain that allows you to track the purchase, storage and sale of your products - at any point in time.

Once you know where each product is, you can also monitor your inventory levels at a precise, detailed level at any given time.
When you can automatically track how much inventory you have and exactly where it is, managing your inventory goes from being a tedious, manual process to a key part of your growth strategy.

Once it's possible to get accurate inventory data for each distribution channel, you can use that information to plan inventory and automate the reorder process, further increasing the efficiency of your inventory management process. . Once products are purchased, you can also track them from your supplier to your warehouses (down to the exact shelf) and through the fulfillment process to the customer and back through the returns process.

Why is inventory management important?

Inventory management allows you to keep track of your stock at all warehouse locations and at all stages of the inventory cycle (stock physically available, stock requested from suppliers, and stock booked in open orders) and ensure that you never run out of product. At the same time, you can avoid overstocking and understocking by forecasting demand based on consumption data. It also helps you process orders faster and more efficiently, which can save you time and money.

In addition, using an inventory management system helps you avoid overselling, which can hurt your reputation. Finally, an inventory management system can help you make better decisions about your stock levels and improve the overall efficiency of your business.

Benefits of using an inventory management system

Using software for a business process as important as inventory management comes with a whole host of benefits, including

Automated inventory management

Potentially the biggest benefit of an inventory management system is automation. Automation avoids the risk of human error, saves you endless hours, and ensures that you don't make mistakes. Such a system is capable of performing repetitive tasks with little manual help once a set of rules has been established. Not only does this give you a real-time view of your inventory levels, as the inventory count is automatically updated when a sale is made. This feature is important not only for accurate forecasting, but also for a good customer experience by helping you avoid overselling. Automated inventory software also allows you to see where your inventory is in real time. This is especially important if you store your inventory in multiple locations, such as a warehouse and a retail store, or if you have more than one sales channel.

Inventory forecasting for holidays and peak season

When order volume spikes significantly due to holidays or events throughout the year, such as a major influencer marketing campaign, accurate demand forecasting can help inventory keep pace with demand. Historical and seasonal data can also be used to understand sales patterns that require inventory adjustments at different times of the year.

Prevent out-of-stocks and overselling

Overselling is a major challenge for growing e-commerce businesses. If you don't keep a tight rein on your inventory, it's easy to run out of products without realizing it, leading to overstocks. Not only are your customers unlikely to return, resulting in wasted marketing budget and customer acquisition costs, but you could also be excluded from certain marketplaces. An inventory software Philippines system manages orders and inventory across all your sales channels simultaneously, so you know when to replenish your stock.

Reduce your e-commerce cost of doing business

Advanced inventory management reports show you what you have in stock, so your warehouse staff doesn't waste their time looking for inventory that isn't in the warehouse. This keeps picking, packing and shipping running smoothly so you can fill more orders as efficiently as possible.

Another way to save money is to not order too much of a product that has low sales. With accurate data and meaningful reports, you can get a clear view of the products your customers are buying.

Better inventory planning and forecasting.

Accurate reports and information are key to any successful business. A software system that integrates with all marketplaces and sales channels where you sell, as well as shipping and third-party logistics (3PL) providers, ensures that all information is accurate and provides real-time visibility into your business. This allows for better decision making, accurate forecasting and planning of inventory, reducing wasted costs from unsold inventory or inventory in the wrong locations.

Improve supply chain operations

Unexpected challenges are normal when it comes to the supply chain. With an inventory management system in place, retailers and e-commerce companies can more effectively implement a supply chain diversification strategy. More suppliers means you reduce the risk of long waits for products when a supplier can't deliver on time. You can prepare in time for a specific period, such as peak season, to order the right amount of goods from a supplier and mitigate any problems.

Easily add new distribution channels

Want to try a new distribution channel for your products, such as a marketplace? An inventory management system makes adding new channels easier by centralizing your inventory management in one place, so you always have a real-time view of your inventory, even if it's sold in multiple locations. Features like real-time inventory synchronization and forecasting are even more important for inventory control when your inventory can be sold in multiple locations at once.

Gabriel451
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