Provider Spotlight Features ecomdash
5 Ways that Sound Inventory Management Improves Customer Experience
In this month’s Provider Spotlight, full-service solution provider ecomdash shares insights gained from their experience supporting multi-channel eCommerce sellers with their inventory and order management platform. If you’ve ever struggled with your inventory management, read on for their practical advice. Not yet a seller on Walmart Marketplace? Apply today to get started!
Creating loyal fans
Satisfied customers are far more likely to return to your store for future purchases. Developing happy and loyal customers should be the most important aspect of any business – both online and brick and mortar.
Effective inventory management can greatly improve your customers’ experiences with you, keeping them happy and ready to buy from you again.
Below, we’ll look at the ways inventory management affects the customer experience, along with some best practices to get you a step ahead of your competition.
Ways that effective inventory management impacts customer experience
1. Stock out prevention
When it comes to the customer experience, one of the costliest scenarios a business can find themselves in is when a shopper buys a product and finds out later that it is no longer in stock. Not only does the business have to process a refund, but they usually deal with negative reviews and possible suspension on the marketplace.
The constant tension between having too much inventory and carrying too little inventory is purgatory for some businesses.
When you over stock, you run the risk of paying more in storage fees and you tie up capital that could be better spent on marketing your business. When you have too little stock, you run the risk of stock outs and dissatisfied customers.
2. Order fulfillment accuracy
Have you ever ordered something online, waited for it to be delivered, only to be disappointed when you open the package and it contains the wrong product?
It’s a frustrating experience for customers, and it can be detrimental to your brand’s reputation. On top of that, the returns process is difficult for the brand to handle. With the costs of the return label and to restock the product, many brands can’t afford it.
If that isn’t bad enough, the returns process is a deal-breaker for the shopper too, with almost 82% of customers not returning if the process isn’t easy.
3. Lead time reduction
Your shipping lead time is defined by how long it takes from the time your customer placed an order to the time you’ve shipped that order. It is also referred to as processing or handling.
It’s one of the main factors affecting your customer’s satisfaction. It shouldn’t come as a surprise that customers prefer brands that fulfill and ship their orders as quickly as possible.
Lower lead times mean happier customers. Mismanaged inventory can cause delays in lead time, which won’t sit well with today’s online shoppers.
4. Profitable pricing
How much you charge for your products affects more than just your revenue. Pricing affects whether shoppers buy your products or your competitor’s products. In fact, pricing is the most-cited reason that nearly 70% of online shoppers abandon their carts.
To prevent abandoned carts, you must know how to effectively price your products. When you price too low, you aren’t making any profit – or worse, losing money. When you price too high, you simply won’t be competitive, and shoppers will look elsewhere.
Now, you may be wondering what pricing has to do with inventory.
Well, before you can track your products, you need to know how much they cost. We aren’t talking about just the cost of the product, but the cost of goods sold (COGS). This includes the costs to receive the inventory, store the inventory, and any software needed to manage it.
Tracking your cost of goods sold can help you understand that sweet spot to price your items, but it can be difficult. Though, knowing you have the best profitable prices that make your customers want to buy from you is worth it.
Before you can track your products, you need to know how much they cost.... This includes the costs to receive the inventory, store the inventory, and any software needed to manage it.
5. Effective holiday preparation
Sales can easily double or triple during the period from Black Friday to New Year’s Day. Many retailers simply aren’t prepared for this spike in customer orders.
If you aren’t prepared, you could have a slew of unhappy customers. Failing to meet the demand during this peak season compromises your brand’s reputation and image. That’s why it’s essential to forecast seasonal inventory as accurately as possible. Review these important steps for thorough forecasting.
Steps for accurate forecasting
- Pull Data: For seasonal merchants, you must look at the last 12 months to accurate forecast. If you have it, take the last few years’ worth of sales too.
- Identify Season: Once you have the months mapped out, you need to pinpoint when your season starts and ends.
- Average Sales: Now that you have the timeline, you need to take the average number of sales during this period across the last few years.
- Monitor Trends: Make sure you take note of any increase or decrease in sales over the years. You need to plan for this year, whether that means your product’s popularity is growing or not.
- Calculate Lead Time: You need to know the supplier lead time for your products. This is important for ordering your products. If it takes 2 weeks to receive products, you need to plan accordingly.
- Plan for Promotions: Are you planning on any new promotions or marketing campaigns that you haven’t tried in the past? Be sure you quantify these results and include them in your forecast.
Inventory management best practices
The following strategies will help you maintain effective inventory management, thereby developing a happy and loyal group of customers.
Assign every product a SKU
If your product offering is small, you may think you don’t need to assign products a SKU, but it’s important that each item you sell has a SKU. Not only will it help you keep track of your items, but it helps with order accuracy, especially if you use a 3PL.
Use the FIFO method
The “first-in, first-out” method means that you sell your oldest stock first. This is important for perishable items, for obvious reasons. However, it’s also good practice for non-perishable products, as packaging may become obsolete and therefore unsaleable.
Learn how to forecast
Accurate sales forecasting is essential for proper inventory management. Consider factors such as your previous year’s sales, market trends, guaranteed sales for contracts or subscriptions, the economy, and any planned promotions.
It’s a good idea to establish and nurture the relationships you have with suppliers, 3PLs, and other operational partners. It’s inevitable that you’ll run into inventory issues at some point. If you already have a good working relationship with your professional partners, they’ll be more likely to help resolve those issues.
Audit inventory frequently
When you audit at closer intervals, it’s easier to locate inventory discrepancies and correct them before they become a widespread issue.
Have contingency plans
While you can’t have contingency plans for every situation that will come up, it’s important to plan for common inventory issues. What will you do if you oversell a product? How will you handle a supplier suddenly discontinuing a product that you sell? Thinking about possible issues ahead of time will help you resolve them quickly if they happen.
Use a comprehensive inventory management solution
If you do nothing else on this list, do this – it’s a must. Proper, effective inventory management requires that you have accurate stock levels. Inventory should update automatically when product sells or new products are received. The best way to ensure accurate inventory levels is to invest in an inventory management solution, which removes the guesswork around product quantities. You’ll know definitively what you have and where – even when you have multiple sales channels to manage.
Set inventory alerts
Inventory management software typically allows you to set inventory alerts for when specific products reach a certain limit. These alerts will help you stay on top of your product levels and when to order more.
Better inventory management with ecomdash means more loyal customers
As you can see, effectively managing your stock is crucial to the success of your business. If you don’t have a good grasp on your inventory, you may end up with dissatisfied customers and a poor brand reputation.
The good news is that it isn’t difficult to prevent many of the issues listed. It just takes preparation. When you manage your inventory properly, your customers will be happy and, most importantly, loyal.
At ecomdash, we help you optimize this critical function by offering robust inventory management software that’s packed with the features needed to accurately and efficiently manage your inventory across each marketplace and shopping cart.
- Our platform empowers you to sell products on multiple channels without the fear of overselling. With our software you can
- See near real-time inventory updates across all your connected sales channels, including your products on Walmart.
- Manage stock quantities across multiple fulfillment centers and personal warehouses.
- Easily handle manufactured products, kits, multipacks, and components.
Start improving your customers’ experiences today with ecomdash. Try it free and join the thousands of retailers that have trusted us to process more than $2 billion worth of their customer orders.
This is a guest post from ecomdash, an end-to-end order and inventory management platform that gives eCommerce entrepreneurs and small businesses the confidence to expand their company to multiple online marketplaces and beyond.