6 Best Inventory Management Techniques to Hike up Online Business in 2022!
The eCommerce industry has witnessed drastic success in the past few years in India. In the era of the internet and smartphones, this growth will expand ten times more by the end of 2023. It is predicted to reach from 51 billion to 350 billion dollars in the coming years. Customers are more into online shopping these days, so you must deliver tremendous customer service to gain their trust and loyalty as a seller. Out-of-stock situations are the essential components in providing a phenomenal customer experience.
In this regard, applying effective inventory management techniques is imperative for the success of your business. The competition is increasing rapidly, and to stand out in the crowd of millions of sellers, you must apply several inventory techniques to make your individual presence in the marketplaces. Unique and effective inventory management techniques can allow you to build a solid market presence. In the process of implementing several strategies or techniques, you can take advantage of inventory management software such as eVanik OWS. In this blog, you can discover the six best inventory management techniques to hike up your online business.
Why is there a Requirement for Inventory Management Techniques?
Before knowing the techniques, it is essential to know their importance. If you are the one who has started your eCommerce business, then it is more essential for you. Inventory management is the most critical aspect of the eCommerce business. To sell your products on various eComm platforms, you need to keep a check on inventory. Without accurate inventory management, you may not be able to fulfill the demands of your customers. That is when you need to apply several techniques that can help you manage stocks adequately. Let's see what those primary techniques are.
Six Inventory Management Techniques to Upsurge Your Business
As an eCommerce seller, you can apply various inventory management techniques. Here we are mentioning some of the best ones that can help you immensely in managing the inventory.
FSN (Fast, slow & non-moving) Analysis
The fast, slow, and non-moving inventory technique divides products based on their quantity, consumption rate, and the rate at which the inventory has been used. You can segregate the products as fast-moving, slow-moving, and non-moving. Products that have high usage frequency are known as fast-moving products. Products that have slow usage frequency are known as slow-moving products. Non-moving products are products that are only utilized for a short period or a specific duration. This effective technique can help you to make inventory management decisions. You can analyze which products should be placed in the warehouses and which you should not. You can make an essential decision regarding non-moving products should you keep them or discontinue selling them.
Apply JIT (Just in Time) Method
In inventory management, overstocking and the stock-out situation are also harmful to your online business. To avoid overstocking costs, many sellers use JIT or just in time methods. With the help of these peculiar inventory management techniques, you can order only what you require to meet the immediate demand of your customers. With no excess inventory in hand, you can effectively save the cost of storing products in various warehouses and insurance as well. In this way, you can order further inventory when the old inventory stock is close to restocking. However, this is a little risky technique because a slight delay in ordering new products can lead you to an out-of-stock situation. So you need to be a little conscious and implement proper planning so that you can timely stock your products.
Implement Always Better Control (ABC) Analysis
ABC analysis refers to Always Better Control Analysis. Generally, inventory items are classified into three major categories. These categories are divided into A, B, and C. Category A includes high-value products with a low frequency of sales. Category B includes moderate value products with a moderate frequency of sales. Lastly, category C includes lower-value products with a high frequency of sales. ABC analysis classifies the products you should reorder more frequently and which products you do not need to get in stock as frequently. This inventory management technique can enhance the turnover rate of your inventory and minimizes obsolete inventory as well.
Get Along with Dropshipping
Under this technique, you can outsource almost every aspect of managing the inventory. It is basically suitable for an individual seller who does not rely on efficient inventory management as their success factor. Dropshipping is particularly beneficial for sellers who want to get into the eCommerce business but can not afford to pay the cost of a warehouse of inventory management. By applying this technique, you must buy products from any third-party vendors and directly ship them to your customers' addresses. In this process, you don't need to manage your inventory or buy products in bulk. Hence there is no need for bulk products, which diminishes the risk of loss.
Apply Bulk Shipping
This inventory management technique is used by sellers who assume buying bulk products is always cost-effective. It is best for sellers whose products have consistent demand and can experience a sudden increase in demand. If you are one of them who manufactures many in-house products and handles unexpected demand growth, then you can go for this technique.
Practice Demand Forecasting
It is one of the perfect inventory management techniques that can prove much effective for your eCommerce business. The speedy growth of the eCommerce industry has increased the demand of customers. That is why demand forecasting is beneficial in terms of never missing out on fulfilling the demand of your valuable customers. You can use your previous inventory data to predict the upcoming demand of your valuable customers. Historical and season-wise sales data can make forecasting much more effortless and efficient. This way, you can analyze when and at what amount customers require any specific product. To apply this technique successfully, you can take the help of inventory management software such as eVanik OWS.
The above inventory management techniques are essential in managing the eCommerce business model. The stock in and stock out situations should be managed accurately. It will be best if you adopt these techniques in your eCommerce business to make your processes more efficient. With the growing online business, inventory management is expected to become more valuable for the success of your business. Adopting such techniques can smooth the workflow and upsurge the sales channel in broader terms. It can never put you in such a situation where you fail to fulfill the demands of your valued customers. In applying some vital techniques such as demand forecasting, you can take the help of inventory management software such as eVanik OWS which has a centralized inventory feature across all the platforms you are dealing with.