E-Commerce Case Study

As experienced online business people know, there is more to e-commerce development than setting up your online store and waiting for the orders to come flowing in. If you are thinking that online traffic and marketing are also required, you are right, but there is more. There is a physical side to e-commerce that is equally important: inventory. You have to order it, store it, manage it, handle it, and ship it. While you can outsource the inventory part of your business via drop shipping, managing your drop shippers, who are basically suppliers that ship directly to your customers, is still inventory related work.

There are many reasons why e-commerce businesses maintain their own inventories. Some have a brick and mortar store in addition

Regardless of your reasons for keeping product inventory, its proper management is critical to your business success. Here are five inventory management tips for a smoother and more successful e-commerce development.

Avoid Overselling

Overselling occurs when there is insufficient inventory to cover your online orders. This is sometimes caused by a physical miscount of inventory items or a data entry mistake. Lag time between when an order is placed and when it 's reflected on the product availability figures of your e-commerce store can also cause people to order items that aren 't in stock. Time lag often occurs as a result of a lack of integration when selling across multiple online marketplaces including your e-commerce site. To insure instant updating across all platforms, thoroughly integrate your inventory management software.

Don 't Under Stock

When items are listed as out of stock, many of your customers won 't wait for backorders or for stock replenishment. They will buy elsewhere. Avoid these lost sales by ensuring that your inventory doesn 't "stock-out." Reordering must take into account the delivery times of your suppliers. It 's advisable that you keep some safety stock on your most profitable and highest selling items, in case your resupply shipments fail to arrive on time or in good

It all comes down to uncertainty about your demand projections as well as your supplier reliability. Improving your demand projections and supplier reliability means less uncertainty and therefore a smaller safety stock.

Reliable Suppliers Are a Must

Unreliable suppliers harm your business because their shipment delays either cause inventory stock-outs which cost you sales, or forces you to tie up money in bloated safety stock levels. Before using a supplier, find out what you can about their reputation. It 's important that they consistently meet their delivery deadlines.

Close proximity to a supplier is a plus because of reduced shipping time and costs. It also allows you to easily check their operations first hand. Large suppliers that have more available resources tend to be more reliable. They often use software to track and fulfill their orders while many smaller suppliers use pen, paper, and filing cabinets. However, size is just one of several criteria you should base judgments on.

Use Drop Shipping When It Makes