As an eCommerce business, you need to pay a lot of attention to your inventory. Because this is what ultimately reaches the customer’s doorstep. You don’t want a damaged product to be packed and shipped to your customer. Similarly, you don’t want an expired item to reach your customer. When you’re selling from a small house, managing your inventory might seem easy. But, as your business grows the challenges in inventory management are bound to cloud you.
Challenges in inventory management can be real roadblocks to your business. In other words, they can make you feel disheartened at times, especially when you’re already putting in too much effort. However, it’s the little things that you miss that create all the difference. In other words, inventory management can be a real tough nut to crack. And with the challenges in inventory management you might even feel like giving up on your business.
So, what is it that you do? How should you manage your inventory? But, before we go on helping you with these you need to understand the challenges in inventory management. This is because you might be facing many of these even without realizing. And as you do, it becomes important to address these.
Many challenges on inventory management become greater as you expand your business. While these might have been prevalent in your business since a long time, they kept on doing silent damage. In other words, the little issues that you keep on ignoring once become too much to handle. And by the time you scale your business, these become so large that they are too much to handle.
Therefore, instead of letting these issues crop up, it is best that you address them quickly. So, let’s take a look at the top challenges in inventory management. Next, we’ll look at how to address them adequately.
7 Top Challenges in Inventory Management
Challenges in inventory management can be quite cumbersome. And while these might be greater for some line of businesses, for others it might be few. However, this can have an immense impact on your business. Therefore, keep your eye on the following-
You Don’t Know How Much Inventory You Have
Most businesses suffer from these challenges in inventory management. They don’t know how much inventory they have at any given point of time. You might think that this is quite normal for large businesses. But, it shouldn’t be the case. Whether your business is large or small, you must know the quantity of inventory you possess.
This is because you need to understand what is going on with your inventory. You need to realize whether you have more stocks of a particular product. Or whether you are running low on your best selling products. Often businesses lose out on customers because their products show as out of stock. Therefore, the customers migrate to other competitor businesses to satisfy their shopping needs.
Your Processes Are Inefficient
Many times the processes you are adopting for your business might seem very inefficient. In other words, you are relying on old methods for your inventory management. These create quite a lot of challenges in inventory management. For example, if your inventory management software is quite old you will not be able to manage your inventory successfully.
Similarly, if you are using outdated technologies, you might still be doing a lot of work manually. This otherwise coils have been automated by leveraging latest tools and practices. All these factors might seem small. But, they cause a lot of inefficiencies in your business. Therefore, you need to have an efficient process in place to make the most of your business.
Customer Demands are Evolving
Customer demands are always changing in the world around us. One moment you will find certain market trends. While in the other, these will have changed. It might happen that you’ve been thinking that one of your products is best selling. And soyou keep on sticking to replenishing it and marketing it everywhere.
However, it is possible that customer demands change during a particular season and some of your other products start highlighting well. Therefore, if you are blindly following your intuition, without realizing the demands of your customers, you’re failing. In fact it forms one of the biggest challenges in inventory management. However, when you upgrade your standard operating procedures, you understand the customer more profoundly. In other words, you manage your inventory and keep up with their needs at the same time.
Your Inventory Has Limited Visibility
It is possible that some of your inventory might have limited visibility. This will impact its selling and ultimately your profits. When your business begins to grow it might become difficult for you to understand which of your inventory has been sitting for long. In case you are selling perishables, this can be deadly for you.
Your inventory might turn bad or rot just by sitting in some corner of your warehouse. This would have had a good potential to sell, if you realized about their existence well in time. However, the case is different now. Your ability to see through your inventory impacts your business at several levels. These include strategies as well as profit making. Make sure that you use the right software and the correct inventory management tool for the task. Inventory management techniques such as LIFO and FIFO can be out to use in some of these cases.
It is Difficult for You to Manage People and Space
Your warehouse is your paradise. You own every inch of it. For this reason, you must take advantage of it at all costs. Many times businesses arrange their inventory haphazardly in the warehouse. This means that the inventory is not only difficult to pick when there is an order, but also that the space for your staff to move in is less. As a result, it will result in efficiencies for your business. What you can do for your business is that manage your space and people more effectively.
If you have a warehouse space, spend time organizing it. And organizing doesn’t just mean any way you like. Pay attention to your best selling products. Keep them forward. Strategically finalize the placement of each and every product while leaving space for your staff to walk.
The Competition is Becoming Cut-Throat in the Market
The competition is cut throat in the eCommerce market. This is indirectly one of the biggest challenges in inventory management. Every day there are many new businesses trying to carve a niche for themselves with a distinguished product idea. With low cost labour and favourable market policies, competition is emerging in countries like India, China and Latin America.
Therefore, more and more businesses are coming up. These are leveraging the latest tools and technologies in the market. Moreover, with international shipping making its mark upon the sellers, many businesses are expanding to overseas. Therefore, creating a difference with your inventory becomes even more crucial. And that will not happen until you use proper inventory management techniques.
There is a Disruption in Supply
More often than not there is a disruption in the supply chain itself. Some suppliers are not able to provide goods on time. This leaves you with an imbalance in your inventory. Especially, when you know that it’s the peak season for selling particular products. And there might be chances that your sellers are not able to cater to all your demands adequately. Therefore, you will lose out on your sales?
To avoid such challenges in inventory management, it is best to keep a buffer inventory with you. In other words, have some inventory that you can count on in situations of distress. Alternatively, it is best to have more than one supplier in place. This way in case one of your suppliers is not able to cater to your demand, the other one does.
Tips to Overcome the Challenges in Inventory Management
Overcoming the challenges in inventory management is easy. Only if you know the best practices. One of the best things you can do for your business is to make sure that you start taking these steps as early as possible. This will avoid any kind of losses due to challenges in inventory management. At the same time, it will also ensure that your business is on the right track.
Backup Your Inventory Data
Start by backing up your entire inventory data. This way you ensure your business of any technological failure.
Forecast Demands
Demand forecasting is fundamental for your online business. Prepare your stocks for a season or otherwise by knowing what sells and when.
Track Your Inventory Accurately
Tracking your inventory ensures that you have transparency. You know about the details of your inventory including what goes on and what comes out.
Have Multi-Location Warehouse
This ensures that the challenges of inventory management are kept at bay with adequate management. This also reduces your shipping costs.
Use a Reliable Shipping Partner
You must understand and address the challenges in inventory management as soon as possible. If you’re just starting your business, it’s an insight into the world of eCommerce. So, ensure you follow the ebest practices and use a shipping platform that helps you deliver your inventory to the right customer. Dash101 is a one-stop shipping platform that helps you find the best courier company from 8+ options under one roof. Moreover, you get to ship at fares starting RS 23/500gms to over 260000 Pin codes.
