eCommerce Supply Chain Operations: Four Best Practices for Managing Inventory
When your business grows out of short-term inventory management solutions, you need to focus on strategies to gain visibility across supply chain operations. Doing so allows you and your team to make informed, confident decisions that increase market share and improve brand value.
4 Proven Methods for Improving Supply Chain Operations
Optimizing your inventory management and supply chain operations can be a daunting task for a growing eCommerce business. But, working with the right eCommerce fulfillment partner, you’ll benefit from:
- Real-time inventory tracking – When your company is in its early stages, you might rely on a makeshift inventory management solution like Excel to keep tabs on orders and returns. Hopefully, your business will grow out of Excel and require a solution that tracks inventory in real time. Having visibility into your inventory isn’t only helpful for your own back-end supply chain operations, it’s also a service to your customers. They expect that the products they order will be in stock. If they’re not, the customer relationship will be severely damaged. The next time they want to purchase, they will be more likely to take their business elsewhere.
- Know your velocity of goods – The velocity of each product is defined by the amount of time it takes to sell when in stock. When you have a clear picture of velocity across your product lines, you can make informed inventory decisions. For example, if a particular product tends to sit in inventory for weeks before a sale, you could do a cost-benefit analysis to decide whether the margins of that sale are worth the cost over time. With product velocity in mind, your decisions to liquidate can be made quickly and confidently.
- Create sharable reports – As your business grows and the employee count increases, it’s crucial that you are able to create and share reports across your supply chain operations. These reports provide insight into key performance and business metrics like inventory, shipping costs, yearly profit margins and more. Armed with these reports, you can keep employees informed and make necessary strategy adjustments as you go.
- Compare your metrics to industry standards – Measuring how you stack up against competitors is a great opportunity to identify changes you might need to make to your business. For example, uncovering that you’ve spent twice what your competitors have on warehouse space but not seeing a quantifiable return on investment could lead you to reevaluate your warehouse costs. Checking quarterly and annual benchmark data reveals a lot about other eCommerce brands, so you’ll want to be sure you’re up to speed.
When you work with Dotcom Distribution, your eCommerce business enjoys these inventory management advantages and many more.
Our latest eBook, “Emerging in eCommerce: A 360º View From the Inside,” features our customers and their expert advice for eCommerce businesses that are looking for greater control over supply chain operations. Download our eBook to learn more, or contact us today.