Those operating eCommerce websites face several challenges. They obviously need to keep their stores operational to ensure as many people as possible can purchase their products. However, there’s also a lot going on behind the scenes. Inventory management, in particular, can become difficult in the fast-paced world of eCommerce.
That’s why many online stores typically have other software to help with management. A good inventory management system is key if you wish to ensure your store meets the needs of your customers.
What Does an Inventory Management System Do?
At its most basic, an inventory management system will help you keep track of every sale made through the online store. The software will deduct these sales from current inventory counts to let you know exactly what you have left.
The process must be instant. If several customers order the same product at once, there’s a possibility that inventory will deplete quickly. A good system will not only keep track of the sales but also update the eCommerce store as and when stock depletes.
Minimum Stock Levels
So, that’s the basics of inventory management systems as they relate to eCommerce stores. However, the best software will take things a few steps further.
A database lies behind every eCommerce store. This database maintains records of every single item in the store and records everything from the item’s name and category through to the price attached to it. Any software that helps you manage inventory should connect to this database seamlessly, integrating with it to collect relevant data for use in reports.
It is in these reports that you will find even more value from your software. Knowing how much stock you have is one thing. Understanding the minimum you need to order so that you can keep the warehouse stocked appropriately without losing sight of customer demand is quite another.
A good software constantly analyzes your webstore’s sales so that you know exactly how much demand exists for your products. Using this information, you can manage orders and ensure you don’t end up buying too much of a product, which takes warehouse space away from products that have higher demand.
How This Benefit Retailers
This all sounds great, but retailers really want to know how such software will benefit them. There are a few key advantages to implementing an inventory management solution into an eCommerce store.
Tracking Supply and Demand
As noted above, supply and demand are key for all retailers. A good software helps you keep up to date with what your customers want. The data you receive tells you which products prove popular among your target audience and, as importantly, which ones don’t.
This information will influence all of your purchasing decisions. With the right data, you can avoid making costly purchasing mistakes that could drive revenue down and place the webstore at risk. Better yet, this data can help you pick out market trends that dictate how you introduce new products into your store.
Pooling Information
Many retailers stock products from a wide range of manufacturers. Creating multiple databases to keep track of this product information costs the business both time and money.
A good software makes management of this information easier. You can pool it all into a single source from which the eCommerce store draws. Not only does this ensure the accuracy of the information on the website, it also makes it much easier to maintain information coming in from several sources.
Improving the Customer Experience
Webstores that offer a poor customer experience fall by the wayside. The statistics bear this out. A recent survey showed that 55% of online shoppers look at reviews before making their purchasing decisions. Every poor customer experience has the potential to create bad reviews that could turn shoppers away from the store. As importantly, 88% of shoppers claim they will pay more if the customer experience is worth it.
An inventory management system helps here because it ensures eCommerce stores don’t trip up on the pitfalls that negatively affect the customer experience. Software will ensure you don’t sell products that are currently not in stock. The data pulled from the software can also help you determine which products are getting returned most often due to faults, allowing you to pull them from the store before they cause major problems.
The Final Word
Quality software lies at the heart of all successful eCommerce websites. Managing your inventory is just the start. There is so much data out there for you to take advantage of, but you need good software to do it.
