The importance of inventory management cannot be stressed enough for eCommerce and online retail brands. Effective inventory management allows brands to fulfill orders on time and accurately. And as brands grow out of small warehouse space and into larger facilities, so does the need to efficiently manage inventory.
What are the Goals of an Effective Inventory Management System?
An effective inventory management system is the cornerstone of successful eCommerce and online retail brands. With a strategic plan in place that optimizes the process of overseeing and managing inventory, including real-time data of inventory conditions and levels, companies can achieve inventory management benefits that include:
- Accurate Order Fulfillment – Imagine this scenario: A customer places an order and an eCommerce brand receives the order. The brand sends it to the warehouse only to discover that the product is out of stock. Or just as bad, the eCommerce brand ships the wrong item. This isn’t an uncommon story if inventory is poorly managed. Taking the time to develop a more robust plan can help brands avoid inaccurately filled orders, high return volumes and a loss of customer base.
- More Efficient Inventory Planning and Ordering – It’s difficult to gauge which products are needed if there isn’t a clear way to tell what products are already stocked. If online retailers don’t properly manage the inventory they already have, they can easily overstock items, and some of these items might not be strong sellers. Detailed inventory management mitigates these issues, allowing warehouse managers to refresh inventory only when needed. It’s both space and cost-effective.
- Increased Consumer Satisfaction – Customers that shop online are eagerly awaiting their orders, and there’s nothing worse than when their orders arrive not-as-described, late or damaged. When that happens, buyers are less likely to purchase from the brand again. On the other hand, good inventory management leads to orders being fulfilled more quickly and shipped out to customers faster. The enhanced processes can help eCommerce and online retail brands build a strong repertoire with consumers – and keep them coming back for more.
As you can see, proper inventory management is very important, especially as inventory volume increases, and can make or break a business!
What are the Benefits of an Efficient Inventory Management Plan?
There are so many great advantages that can result from managing inventory properly. Here are some additional benefits to keep in mind:
Improved Accuracy of Inventory Orders
Accuracy of product orders, status, and tracking are critical to good inventory management. An effective fulfillment partner will have real-time software and systems in place to make sure no product is left untracked throughout the fulfillment process.
Improved Warehouse Organization
A good inventory management strategy leads to an organized fulfillment center. An organized warehouse results in more efficient present and future fulfillment plans. This also includes cost-savings and improved product fulfillment for businesses utilizing the warehouse for managing inventory.
Improved Warehouse Productivity
With proper inventory management in place, less time and resources are spent invested in managing inventory and can be allocated to other areas. Technology is often used to speed up tracking and fulfillment operations, ensuring inventory records are accurate.
Save Time and Money
Due to improved ordering accuracy, efficiency, and product flow, good inventory management results in saved time and money.
Improved Customer Retention and Engagement
Effective inventory management and control protects from incorrect or damaged goods being shipped to customers. This helps improve customer experience, protect from issues such as refunds, and achieve more repeat buyers.
Should I partner with a 3PL to Manage my Inventory?
It’s beneficial for eCommerce and online retail brands to partner with third-party logistics (3PL) providers that understand the importance of managing inventory. An experienced 3PL company has the tools, equipment, and software necessary to simplify inventory management and increase warehouse efficiency. As a result, your brand receives the benefits of a well-optimized inventory management and control system.
An Experienced 3PL Can Help Improve Your Inventory Management System
Inventory management or control is crucial to a successful brand and business. Simplify your inventory management with the help of an experienced fulfillment and logistics company. An industry leader in strategic eCommerce fulfillment and logistics solutions, Dotcom Distribution improves inventory management processes for a variety of online retail brands.
Through a precise combination of innovative technology and experienced warehouse personnel, we provide robust inventory management and support that is proven to increase overall efficiency and customer satisfaction.
To learn more about the importance of managing inventory, contact us today.