The internet has created new jobs, new opportunities, and new businesses—and one of them is that of the online retailer or e-tailer. In the US alone,1.8 million e-tailersare selling their products on e-commerce platforms or marketplaces such as Amazon and eBay.
Online retailing faces new challenges as e-commerce is more complex than it might seem. That’s why employing an inventory management system might prove to be beneficial for businesses in the online retailing trade.
An article in Procedia Economics and Finance enumerates challenges e-commerce businesses face in terms of their inventory management:
1. Reverse Logistics
One of the greatest challenges online retailers will ever have to manage is reverse logistics. This practice is done to achieve customer satisfaction and generate more business.
Proper segregation and management of returned products are crucial for an online retailer’s survival. They have to be able to organize items in distinct categories to check if they can be reused in any way or distributed in smaller pieces to see if their parts and components can be reused in different products.
2. Fluctuating Demand
Seasonality and product popularity are two factors that online retailers have to account for. Theyare typically felt by online apparel stores as a particular product that’s deemed trendy or in season can cause the demand to fluctuate.
With that in mind, online retailers need to have good foresight in order to prepare themselves and overcome those kinds of situations.
3. Managing Several SKUs
Speaking of online apparel retailers, they are usually the ones with a high number of stock-keeping units (SKU) shown on their website or their chosen e-commerce platform. They may run into a problem managing inventory information as each of their products can come in several colors and sizes.
To reduce costs, online retailers will sometimes have to resort to carrying less inventory. However, this kind of practice may increase the risk of experiencing stockouts. Stockouts aren’t healthy for any retailer as they might result in declining customer satisfaction and declining sales. And since transactions areon the internet, it’s easier for customers to switch to their competitors.
5. Multichannel Shoppers
Customers nowadays have turned into multichannel shoppers, making things a bit more complicated than ever.
In today’s day and age, customers are smarter—they browse, research, purchase, and return products through the multiple means available to them. They can buy online and have products shipped directly to their home, or they can buy online, pick the item up, or return it to the store should they see fit.
To manage those challenges, online retailers need to be quick on their feet and employ the following solutions:
- Aim For Organization – Being organized is one of the keys to success in the world of online retailing. This has to do with knowing what you currently have on hand and where to find it.
- Avoid Going Out Of Stock – As much as possible, avoid stockouts as these might cause the interest and trust of your customers to falter.
- Track And Control-Inventory can go out of hand if you don’t accurately track and control the stock you currently have. Your business might just run into situations where you’re either overstocked or understocked.
You can achieve those goals if your business makes use of a cloud-based inventory management system that gives you a real-time overview of your inventory. This doesn’t only help you in making good use of your time, but it also can aid you in your quest to scale your business.
Fiddle is an inventory management system that has an intuitive interface, making it easier for you and your team to track and manage your inventory. Contact us today to learn more.