June 08, 2020 By Bhavesh Surani Category: Ecommerce

A path that connects the warehouse, the eCommerce store like Magento, and finally the customers together is central to keeping all goods well-managed and documented. Inventory Management System provides a template to online merchants that increases the visibility of the available products. A like all ecommerce development, the Magento development process also needs that ubiquitous stool to handle inventory.When running an eCommerce store, it is imperative you don’t keep too much inventory that ties up cash or fall short of inventory putting you at risk of losing customer loyalty.

Being a leading Magento eCommerce owner, you must know the best practices for inventory management. Find some essential tips to have better user experience, cost-savings, customer trust, profitability and more. Let’s get started.

The Best Practices to Follow With Inventory Management System

Should you get prepared to handle your inventory, there are so many of issues coming up. Check with them so as to get ready to confront the situations and come out of it as a winner.

  • What if there is no room for inventories in the warehouse?
  • What if inventories run out of stock and sales spike?
  • What if I miscalculate the number of stocks?
  • What if I confront cash flow issues?

These are someof the most intimidating situations directly affecting how you do business and build customer relationships.
Always have a viable plan ready and be prepared for the worst with the following inventory management best practices.

Centralized Inventory System

Yes, you are not likely to be at the forefront of the competition when you continue with the traditional data-recording practices. That tedious and error-prone culture of managing inventory with a pen, paper, and file decelerates your process to advance in this fast-paced digital marketplace.

For any eCommerce businesses, having centralized inventory management is key to staying top of the game. Always ask for a SaaS-based inventory management system. It is an integrated system to help you with calculation, tracking, forecasting and analysis of the inventory from anywhere and anytime globally.It provides you with areal-time update which is quite beneficial to avoid the risks of miscalculations. Alongside cost-savings, you can free up the time of your men and engage them in the more creative purpose of the store management.

The centralized inventory management system is always a perfect fit as long as it serves through a single eCommerce platform.

But, for a large eCommerce business integrated with one or more physical stores, all your data sits in the Point-of-Sale (POS) system. If you sell through marketplaces such as Amazon or eBay and others, there is a huge amount of data needed to be taken care of for inventory management. Both conditions are complex to build a robust inventory management system. In such a situation, the built-in Magento inventory system may not work. You need to have a more dedicated and centralized Inventory management extension for your Magento store. As orders flow through, it derives data from all tools and systems and offers you clear visibility of what is going on in the stores, fulfillment locations, and drop shippers.

An add-on or extension of the inventory management system for your management store gives you the accurate and right information to handle ongoing complexities easily.

Also Read : [How Can You Develop Good Business Continuity Plans for Your Online Business?]

Real-time Inventory Updates

If you want to have better inventory management, you must ensure that your inventory systems are accurate and correct. Having just a near real-time tool is not enough that gives you only a vague idea about your inventory. If you don’t have a real-time inventory, you may soon run out of stocks. In many instances, your Magento store may not inform you about out-of-stock products. So, if you fail to serve your customer, it earns you bad name in the customer circle.

If you fail to serve as the demand surges, it scythes your reputation more, especially when you operate through marketplaces. Having been unable to restock your store may have your account suspended.

But, one centralized inventory management system always ensures you get real-time updates about your stocks and keep your store stocked with necessary goods.

Just-in-Time (JIT) inventory management

Having more than desired products in the inventory sometimes eat up your space in the warehouse, which is troublesome for business owners. But, using the technique called Just-in-Time is a super saver for spaces and money too. In this process, the number of orders dramatically matches with the number of volumes at the warehouse the customers want to order or likely to order. With the decrease of excess and unnecessary products in the warehouse, you can lower storage costs, and save money. However, unless you have a good understanding of customer buying behavior, you cannot embrace this technique.

First In, First Out(FIFO)

This is a process where order fulfillment happens from the top tier of the product pile. The practice of this inventory management highly suits perishable products so the food industry needs this kind of inventory management at a large scale. As the products need to go out before the expiration date, they do not take up much space in the warehouse.

ABC analysis or Selective Inventory Control

If you call it selective inventory control or ABC analysis, it determines product classification based upon several predefined factors.

The products are categorized depending on their value as per demands soar.

Category A:high value products with low stocks.

Category B: moderate value products with moderate stocks

Category C:low value products with higher quantities

The circumstance may force products to change their categories. Products may go up from category B when demands are high in a particular season. Business success depends on accurate information delivered through buying pattern analysis.

Summing up

Centralized inventory management does help eCommerce businesses find scalability only when you use the best practices. Discover your growth objectives and find the best practices. If you are interested to benefit from our centralized inventory management system, you can contact us at Bytes Technolab. Start today with us.

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