Following are the top 6 measures that will help you to manage inventory of your ecommerce store during the holiday season:
1. Prepare sufficient stock
Prepare sufficient stock: Inventory control is everything. During the holiday season expect a lot more orders coming through your store. The competition is high, and the sales can come and go very quickly. If you’re out of stock, your prospective customers will find another store that is not. You may need to consider stockpiling a bit more (also known as safety stock) to sustain the volumes. Realtime inventory monitoring and inventory forecasting system will come in handy for your retail businesses. If you’re shipping cargo from China, expect to bear higher customs clearance costs. It is best to prepare finances and cargo strategy as well as your inventory level ahead of the peak season. Defer duty and VAT payments on goods imported from outside of the EU with our Customs Bonded Warehouse solution – finance your e-commerce stock with ease during the holiday season. Contact us and see how this can work for you. Bulk shipments are also something to consider.
2. Analyse the business inventory
If you already have an inventory software or system in place, analyse it and see if it will work well under the intense holiday pressure. Complete a inventory analysis and review the historical data, including previous inventory turnover and adjust whatever is necessary. Also, a proper spot check wouldn’t hurt. Make sure that you have enough storage space to store the extra inventory that you are ordering from suppliers in the peak season. Depending on the type of product you have, it might be once per annum or several times a year. Over the last few years, we’ve seen that the bulk of the sales happens in the second half of November, and peeks during Black Friday and Cyber Monday. This is especially true for all e-commerce businesses that thrive around Christmas-season. Some Christmas-related sales have moved away from December to late November. If you usually rely on the Economic Order Quantity (EOQ), which is an optimal order quantity that allows you to minimise the total operating costs, to manage inventory you may want to reconsider this tactic for peak times. EOQ comes handy when inventory costs remain constant over time, but during the peak season, you can lose money without having additional safety stock. By effectively managing your inventory, you are more likely to get through the peak season without a headache.
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3. Streamline order fulfilment process
A successful order fulfilment means keeping track of your orders, managing of your business inventory in a competent way, handling packing and shipping process, and monitoring deliveries. It takes years of experience to have the order fulfilment process running seamlessly (at 99.8% success rate). Just imagine the amount of time it will take during holidays. We recommend implementing a flexible and scalable order management system. Also, consider hiring extra help for the holiday season to quickly execute all the backend processes, including keeping track of the inventory turnover, stock level, managing orders, and shipping orders. Although you might have to fork out for such an arrangement, it will be well worth the investment and you’re not likely to lose money.
4. Label the inventory
Preparation is key in the run up to holiday season. In peak sales periods, prepare in advance things such as labelling and making up kits and bundles ahead of time so that everything is ready to label and ship when the sales begin.
When the products are correctly labelled in inventory systems, it will become quite easy to depend on other people to help you pick, pack and ship orders as well as monitor the stock level of physical inventory. Also, this will help you manage inventory better by avoiding dispatching of incorrect products which is especially painful at the start of your business.
5. Invest in inventory tracking
In simple terms, good inventory management system saves money. Install a proper inventory management software, which will keep your products organised, ensure full stock control and make the execution of orders easy. Otherwise, you may end up in an ineffective perpetual inventory management and unaware of dead stock. Accurate forecast of your stock is essential, and you can’t provide proper pick and pack services without tracking your inventory.
6. Implement returns policy
It’s a must for effective inventory management. No warehouse manager likes returns, but they can’t be avoided. What’s more, returns are likely to increase during the holiday season. This is because customers who received the item as a gift may not like it. Customers may also simply want to exchange products or swap sizes. If your returns policy is strong and robust, it means you will have a fast turnaround, with notifications of returns to speed up the process and keep customers happy. This will avoid bad customer reviews on your website and social media. Besides, your staff will appreciate a good returns policy that will help them process returns promptly, manage inventory and maintain customer satisfaction.
These are the few most important goals to keep in mind if you sell online through your ecommerce website during peak times and want to effectively manage inventory. However, after a certain point, you should consider outsourcing your entire Order Fulfilment process. The Storage Place team noticed that e-commerces closing up on 50+ orders a week take a substantial financial and operational gain from handing over the order fulfilment process to the experts who have experience with successful inventory management.
You can then focus on what’s essential – scaling sales, quality control and growing your business at the front through your sales channels.
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