Running an eCommerce business is tough. A common pain point for eCommerce sellers is tracking and managing their inventory. If you sell across multiple online channels, it gets even harder. During your busy selling season, tracking inventory is just downright frustrating.
How you manage your inventory can determine the success of your business. You want to avoid overselling and upsetting customers, but keeping too much stock ties up your cash.
To help you build a more profitable business, this post considers some key inventory challenges that eCommerce sellers face and how to avoid them.
Keeping Up with Multichannel eCommerce
Shopping behaviors are always evolving. eCommerce grew 13% last year, along with a 45% increase in reported mobile retail spending.
Along with spending more online, consumers are also shopping across multiple channels. According to the UPS Pulse of the Shopper study, multichannel shopping grew from 36% in 2015 to 38% in 2016. These customers are more important to you, too. A Fluent survey found that 47% of shoppers who engage with retailers across 10 or more channels make purchases from their favorite retailer’s website at least once a week, compared to just 21% for those who engage across one to four channels.
Merchants must be where their customers are. So, growing your business often means expanding to new sales channels. However, adding more channels also adds complexity to your business processes. One area hit particularly hard is managing your inventory.
Once you start a multichannel eCommerce business, you can’t rely on manually tracking inventory anymore. The challenges of multichannel inventory management are too great.
Avoiding eCommerce Inventory Common Mistakes
Handling inventory across multiple eCommerce channels brings its own set of challenges. Learn how to avoid some of these common mistakes that retailers make.
58% of online shoppers find it important to have the ability to view a retailer’s inventory status online when searching/selecting products.
Not all eCommerce merchants provide customers with inventory transparency. When a shopper is on your site, they should be able to see if an item is in-stock and when it can ship. If you don’t provide this info, you risk your potential customers shopping elsewhere.
41% of online shoppers have abandoned a cart when products are out of stock. While 38% of online shoppers choose marketplaces instead of retailers due to in-stock status of products.
Customers are looking for this information and you should be able to provide it. If you do have something out-of-stock, consider providing alerts for customers. 53% of online shoppers see these alerts as valuable. It could help save a sale!
When you sell across multiple online channels, you often list the same products or inventory on different channels. This is standard practice. What can go wrong though is that you end up selling your last product to two different customers on two different channels. It’s also possible to just oversell on a single channel if inventory levels aren’t updated fast enough.
Overselling is a major problem that plagues eCommerce sellers. Nothing’s worse than having to tell a customer that you can’t ship the item they bought from you. This type of customer experience causes you to lose a sale, or even the customer for life.
If you oversell on marketplaces like Amazon, you can quickly lose your ability to sell on their platform. Overselling is not something that they tolerate. Make sure to put the right processes in place to combat overselling.
Real Time Inventory Updates
eCommerce sellers often rely on manually updating inventory counts or updating inventory in batches or “near” real time. Near real time inventory updates means inventory is updated once every 15 minutes, once every hour, or just once a day.
When you do this, however, you’re running the risk of having incorrect inventory levels across your channels. Overselling often results from inventory not being updated fast enough. You also can’t show customers inventory levels when their searching products because your numbers aren’t reliable enough.
Better inventory management calls for updating inventory in real time. As soon as an item sells, inventory levels should be decimated across all your sales channels. This is the only way to ensure that your inventory levels are accurate for customers.
Centralized Inventory Management
Most sellers manage their inventory out of their eCommerce platform. When you’re just starting out, this is cost-effective and manageable for your team. However, as your business grows to more sales channels, you will need a more robust inventory management system.
eCommerce platforms aren’t built for this level of inventory management. They won’t be able to handle syncing and updating your inventory across all your sales channels. Instead, merchants need a single designated system to centrally manage your inventory. This can be a different retail system like an ERP or a 3rd-party integration solution.
Choosing an eCommerce Inventory Management Solution
When you’re ready, merchants must research and choose an inventory solution. Picking the right solution is critical for your business. Some end up paying too much for a robust solution full of features they don’t need. Some go too small and pick a solution that doesn’t allow for growth.
When choosing a solution, you want to consider a few things:
- How big do you want to grow and how fast?
- What type of products do you sell?
- What other systems must you integrate with?
- What is your fulfillment process?
- How often do you update inventory?
Answering these questions will help you determine the best solution for you. The answer could be your native eCommerce platform for now or a multichannel management platform.
eCommerce platforms have some native inventory features built in. This is the most simple solution you can use. As you grow, you can look to their app store for any add-ons for more capabilities.
However, if that’s not enough for you, you should consider a robust integration or a multichannel management platform. These types of solutions come in all shapes and sizes, and range in price. You’ll be able to find a solution tailored to your specific business needs.
To see inventory management solutions for specific eCommerce platforms, check out:
- Shopify Inventory Management Best Practices
- Magento Inventory Management Best Practices
- How to Choose a Magento Inventory Management Extension
What to Do Next
Managing inventory for your eCommerce business is a tricky business. There are many areas where sellers make common mistakes. It’s take time and investment to get it right. Keep learning about how to avoid inventory mistakes by checking out eCommerce inventory management best practices.