For subscription box companies and other eCommerce sellers, managing your inventory can be one of the biggest challenges — but it’s also one of the most important to overcome. Properly structuring and managing your inventory means being able to forecast sales, prevent overselling, and get products to your customers efficiently. And if this process is neglected, it can lead to incorrectly listing what’s available on your site and therefore not being able to fulfill orders, which can severely damage your brand reputation.
So what are the best practices when it comes to structuring and managing your eCommerce inventory?
1. Be prepared to make updates in real time
When you are selling products online, customers expect your inventory to be accurate and up-to-date, so updating your inventory in real time is crucial. For subscription services, this is especially important if you’re offering customers optional monthly “add-on” products or promotional gifts with purchase, as these are by nature going to be more irregular than the purchases and fulfillments of your base-line subscription box. It’s also crucial for any limited time sales and promotions, because customers will be making purchases at a much higher rate within a condensed window of time, and any delay in inventory updates could lead to overselling or an inability to fulfill customer orders.
2. Relieve some of the burden through third party logistics or drop shipping
Depending on the size of your company and how established you are as an eCommerce seller, it can often be a good idea to let a third party company take on more of the risk associated with shipping and inventory management. A third party logistics company (3PL) can handle the shipping and fulfillment of your inventory and will manage your stock by routing your eCommerce orders into their own system. For other eCommerce businesses, it may be a good idea to take this a step further and use drop shipping. With this process, you don’t even need to keep your own inventory on hand, because you work directly with a supplier who sells you the items you need and handles all inventory management, while your customer still receives their order as if from your company.
Drop shipping can be an invaluable asset for small and startup eCommerce companies, because it allows you to start selling without having a large inventory of your own. However, it may not be ideal for certain subscription box services, because creating a curated box of products is something you may have to oversee more directly. In this scenario, a 3PL may be a more realistic choice.
3. Maintain a centralized inventory
If you have a single eCommerce store, managing your inventory from that platform is fairly straightforward. However, many sellers want to target a wide range of customer bases by selling from multiple sites and marketplaces (such as Etsy, Amazon, social media or other online marketplaces), which can make managing your inventory more complicated. The best option is to maintain a dedicated inventory system, such as a POS or ERP system that you can integrate into your eCommerce platforms. The last thing you want is multiple systems working simultaneously and updating your inventory from different angles, because that will almost certainly lead to inaccuracies, overselling, and mishandled orders.
4. Check and recheck your systems
Even the most centralized, efficient and up-to-date inventory system can fumble from time to time, and the longer a mistake goes without you noticing, the more likely the issue is to snowball. So make sure you are auditing and reconciling your inventory on a regular basis, to ensure that the real life numbers are matching up with your data. This will not only save you money and headache in the long run, but it will also lead to the kind of efficiency and accuracy that makes for happier, more loyal customers.
