Understanding Inventory Management and Ecommerce
Every business owner knows the importance of keeping track of inventory. It is an essential requirement in the overall management of a business. There can be no business if there is no product. When you have a small business, inventory management is fairly easy; however, it could get a bit more complicated if your small business expands into the world of ecommerce.
Let’s start this discussion by defining the terms inventory management and ecommerce before we discuss how they work together.
Inventory management refers to a systematic method of handling orders and keeping products in stock.
Ecommerce is short for “electronic commerce”. It refers to the purchasing and selling of products or services on the internet. The traditional brick and mortar store can become an ecommerce business simply by adding a virtual store to their website.
Small businesses generally have a small niche of clientele that reside within a particular community (unless your business is set up in a high tourist attraction site). This can be very limiting in the overall scope of how many new customers small businesses can reach. But when ecommerce is added to the equation, small businesses are able to cater to a wide variety of people across the country, and even the globe, in an instant. This requires that business owners keep track of stock and ensure that they have enough product to meet the higher amount of demands on their small business.
The Importance of Inventory Management and Ecommerce in Small Businesses
#1 Visibility of stock availability for customers
When people buy items online, they are essentially giving up the right to be able to peruse a business’s shelves and inspect particular products before purchasing. Instead of being able to manually count how many products you have on your shelves, they have to trust that because there is a photo of the product online, you actually have that product in stock.
Part of helping your customers virtually “see” what you have in stock is to update your online inventory in real-time so that as products are purchased, other customers know exactly how many items are left in stock. Not only does real-time inventory help the customer make an informed decision about whether or not to purchase a product, but it also puts more urgency on the customer to make a decision. If there are only a few products left in stock, your customers will feel compelled to buy before it’s too late!
#2 Offer discounted items
As you check your inventory, you may find that some items have been damaged or they simply are not selling as well as others. You don’t necessarily have to throw the items out or take a complete loss on them. Those items can be placed in a special clearance section of your ecommerce site or they can be discounted at various intervals until you have exhausted your supply.
There are a lot of people in the world who search numerous websites solely to find out what is available in the clearance section. You may be surprised at how fast products that sat on your shelves for months will move once you feature them in the clearance section of your site.
#3 Preemptive communication with customers
When a product is temporarily out of stock, you can notify interested buyers on the website, but you can also take advantage of this opportunity to gather data on the potential customer. They can add the item to a wish list or leave their contact information so they can receive a notification as soon as the item is available again. Either of these options will allow you to reach out to the customer directly when the product has been restocked.
If the customer is still interested in buying the product, they will likely return to your site, and if they are no longer interested, they will still be impressed by the way your small business values them as a customer. If the customer has given you their information, you can also benefit by intermittently sending them advertisements and announcements related to products they have previously shown interest in.
#4 Improve your small business plan
One way to formulate a strategy for the growth of your small business is through including effective inventory management in your business plan. After some time of noticing trends and cycles on your ecommerce site, as well as studying the trends of your given industry, you will discover ways to plan accordingly. You will know when to feature certain items on your site, when to apply discounts, and what particular items are in demand, and the way you order inventory will reflect that.
Again, after some time of developing a plan that takes into account the trends and patterns of your industry, you should then be able to anticipate changes before they even occur in the marketplace. All of this takes a lot of time, but if done right, it can become part of your long-term strategy to stay competitive in your field.
#5 Customer satisfaction
Happy customers mean loyal customers, and customer dedication is gained through fulfilling their needs. A mere 5% increase in customer loyalty can actually allow your small business to yield an increased profit of 25%. When you continually give your customers what they want, when they want it, they will always come back for more. Having an efficient system in your ecommerce small business will lead you and your business to success!
~ S. Wasike, Team Tuxedo Impressions LLC™