It’s no secret that the ecommerce boom is showing no sign of stopping. Global retail ecommerce sales are expected to hit 4.9 trillion USD in 2021, as more consumers turn to online shops to purchase everything from unfinished skyscrapers to zombie apocalypse kits. For entrepreneurs, this is good news: it means that the startup and overhead costs of running a shop are lower since having a storefront no longer carries the importance it once did. More and more ecommerce stores are being run from people’s homes.
While the current landscape makes it easy to run an online shop from home, there’s one important caveat: it’s harder to manage your inventory. There are three common problems that ecommerce business owners run into with regard to inventory: stocking too much, stocking too little, and not knowing what inventory they have. Luckily, these are all easy to fix.
1. Too much inventory
Overstocking isn’t always a result of poor management. Buying in bulk will often get you a better deal, for example. Whatever the reason, however, if you’re running an online store from home, you know that inventory can quickly take over your house—and get in the way of your life. Even those with ample room can have difficulties, especially as your business expands.
Rather than trying to fit your entire business inside your home, opt for more storage space instead. While renting storage space is of course an added cost, it’s certainly less than rent for a brick and mortar store, and the reduced clutter in your home is worth it. Plus, you’ll be able to more easily adjust your business to seasonal patterns, helping you better provide the goods your customers really want. For stress-free storage, remember that certain storage companies offering full service storage will even pick up your extra inventory for you.
2. Too little inventory
Sometimes, to avoid the pitfalls of overstocking, ecommerce businesses will turn to lean inventory methods, stocking only the bare minimum. When taken too far, this principle can lead to understocking. That’s risky too, and can hamper your business’ growth. You should have enough in your inventory to ensure that you’re always in a position to make a sale. Customers are usually not willing to wait for you to get an item back in stock—they’ll simply take their business elsewhere. In order to avoid losing sales and customer loyalty, make sure you’re using an inventory management software that includes forecasting tools. This helps you better determine how much inventory is truly necessary.
3. Not knowing what inventory you have
If you’re still using Excel sheets to figure out how much inventory you have, you’re not only wasting time, you’re opening up your business to a lot of human error. Plus, Excel doesn’t automatically give you information on the trends concerning your inventory. We’ve already talked about ecommerce software like Shopify, and we’re not the only ones. Not only does the platform allow even the least tech-savvy to open up shop, it makes it super easy to keep track of stock. This makes it more simple to let principles like first-in-first-out guide your inventory practices, rather than approaching inventory management by under- or overstocking.