Whether you’re growing your eCommerce business or you’re already well established, how well you manage your inventory can mean the difference between a thriving, profitable business and one that struggles to maintain financial stability. Inventory management plays a crucial role in customer satisfaction and business longevity. Yet, many businesses fall short when it comes to implementing and maintaining a smooth inventory management program.
It’s all about providing the right products to keep up with demand. But for many eCommerce brands, that’s not as easy as it sounds. Here are five common inventory management challenges that eCommerce businesses face today:
- Inadequate forecasting: Inventory forecasting, also known as demand planning, is crucial to ensuring you have enough product to fulfill customer orders without spending too much on inventory. Failing to anticipate surges or dips in customer demand will likely result in an under- or over-supply of inventory, both of which can have negative consequences. Ultimately, poor planning impacts not only your business’s operations but also your growth potential and even your reputation in the industry.
- Manual processes: Most businesses in their early stages rely on manual inventory tracking and management—most commonly in the form of Excel spreadsheets or a good, old-fashioned pen and paper-based system. But as your business grows, these manual processes eventually become unmanageable, resulting in a high error rate.
- Too much or too little inventory: Excess inventory takes up space in your warehouse, ties up cash you could be allocating elsewhere and complicates the tasks of picking, putting away, cycle counting and restocking your inventory. On the flip side, too little inventory means you’ll be unable to fulfill demand, which translates to unhappy customers and lost sales. Whether you have too much in stock or too little, you’ll likely lose money.
- Manual inventory audits: Inventory audits are a crucial step to understanding what you have in stock and what you need. All 3PLs should have some form of automated daily cycle counting in addition to a physical inventory audit that occurs on a predetermined interval. Ask your 3PL about their cycle counting capabilities and the reporting of data back to your team.
While addressing the various inventory management nuances and challenges may seem overwhelming on the surface, it doesn’t have to be. As a premier eCommerce logistics provider, we enable the seamless and scalable management of back-end processes across all available channels, allowing your brand to consistently deliver on your customers’ high expectations.
By relying on a partner who can help you plan and manage your inventory across all channels, you benefit from real-time inventory visibility across the multi-channel supply chain, with a 360-degree view of orders and demand—all while meeting the unique requirements of large retail partners and consumers alike.
Ready to learn more about how Dotcom Distribution can help you scale your business and properly manage your inventory? Contact us today to connect with one of our logistics professionals.