Inventory management ECOMMERCE TOPICS

Inventory management is a critical component of any ecommerce business. Effective inventory management ensures that ecommerce businesses have the right products in stock to meet customer demand, while also minimizing storage costs and reducing the risk of overstocking or stockouts. In this article, we will explore essential inventory management topics for the ecommerce community, along with market statistics to support them. We will also discuss how to work with CMSmart Ecommerce to develop effective inventory management strategies.

Importance of Inventory Management

Inventory management is critical for ecommerce businesses. Poor inventory management can lead to overstocking, stockouts, and lost sales. Effective inventory management ensures that ecommerce businesses have the right products in stock at the right time, while also minimizing storage costs and reducing the risk of obsolescence.

Market Statistics:

• According to a report by Wasp Barcode, 46% of small businesses either don't track inventory or use manual methods to track inventory.
• According to a survey by Software Advice, 39% of small businesses say that inventory management is the biggest challenge in managing their supply chain.

Setting Inventory Goals and KPIs

Setting inventory goals and KPIs is critical for effective inventory management. Ecommerce businesses need to establish clear and specific goals for their inventory, such as maintaining a certain level of stock or reducing inventory carrying costs. KPIs such as inventory turnover, stockout rate, and days of inventory can help ecommerce businesses measure the success of their inventory management strategies.

Market Statistics:

• According to a report by Statista, the global retail inventory shrinkage rate was 1.82% in 2019, resulting in a loss of $99 billion.
• According to a report by Aberdeen Group, companies with the best inventory accuracy achieve a 96% on-time delivery rate, compared to 79% for companies with poor inventory accuracy.

Forecasting Demand

Forecasting demand is critical for effective inventory management. Ecommerce businesses need to use historical sales data, market trends, and customer insights to predict future demand for their products. By accurately forecasting demand, ecommerce businesses can ensure that they have the right products in stock at the right time.

Market Statistics:

• According to a report by McKinsey & Company, companies that use data and analytics to inform their inventory management decisions achieve a 15% improvement in forecast accuracy.
• According to a survey by Deloitte, 45% of retailers say that forecasting demand is the biggest challenge in inventory management.

Managing Inventory Levels

Managing inventory levels is critical for effective inventory management. Ecommerce businesses need to use inventory management software to track inventory levels, set reorder points, and automatically reorder products when inventory levels get low. By managing inventory levels effectively, ecommerce businesses can ensure that they have the right products in stock at all times, while also minimizing inventory carrying costs.

Market Statistics:

• According to a report by Wasp Barcode, 34% of small businesses say that inventory management software has improved their inventory accuracy.
• According to a survey by Software Advice, 46% of small businesses say that automating inventory management is the biggest benefit of using inventory management software.

Managing Product Variants

Managing product variants is critical for effective inventory management. Ecommerce businesses need to use inventory management software that can track inventory levels for each product variant, such as size or color. By managing product variants effectively, ecommerce businesses can ensure that they have the right product variants in stock to meet customer demand.

Market Statistics:

• According to a report by Shopify, ecommerce businessesthat offer product variants have 30% higher sales than those that don't offer product variants.
• According to a survey by Brightpearl, 29% of retailers say that managing inventory across multiple sales channels is the biggest challenge in inventory management.

Streamlining Fulfillment Processes

Streamlining fulfillment processes is critical for effective inventory management. Ecommerce businesses need to use order management software that can automate the fulfillment process, including picking, packing, and shipping orders. By streamlining fulfillment processes, ecommerce businesses can reduce fulfillment time and ensure that customers receive their orders quickly.

Market Statistics:

• According to a report by Statista, 66% of US consumers expect delivery within three days of placing an online order.
• According to a report by Invesp, 56% of customers say that a fast and easy checkout process is the most important factor in their online shopping experience.

Managing Returns and Exchanges

Managing returns and exchanges is critical for effective inventory management. Ecommerce businesses need to have a clear and consistent returns and exchanges policy that allows customers to return or exchange products if they are not satisfied. By managing returns and exchanges effectively, ecommerce businesses can reduce the impact of returns on their inventory levels and maintain customer satisfaction.

Market Statistics:

• According to a report by Narvar, 96% of consumers say that a positive returns experience increases their likelihood of shopping with a retailer again.
• According to a report by UPS, 68% of US online shoppers say that the returns experience affects their likelihood of shopping with a retailer again.Conclusion

Inventory management is critical for ecommerce businesses. By setting clear inventory goals and KPIs, forecasting demand, managing inventory levels, managing product variants, streamlining fulfillment processes, managing returns and exchanges, and working with CMSmart Ecommerce to develop effective inventory management strategies, ecommerce businesses can optimize their inventory management strategies and succeed in the competitive world of ecommerce. By keeping these topics in mind, ecommerce businesses can effectively manage their inventory and maintain a competitive edge in the ecommerce marketplace.