Inventory strategy: how to create one for your e-commerce

Having an inventory strategy can help you track your inventory consistently across your supply chain so you always have enough product to meet demand.

In this article, we will understand better about what this strategy consists of, why it is important and what to consider when developing one for your e-commerce.

What is an inventory strategy?

An inventory strategy refers to having processes and systems in place to manage product flow throughout the supply chain, from manufacturing and procurement to storage and shipping.

This strategy helps ensure you have enough products to meet demand, as well as optimize production, control goods in transit, storage and costs. 

5 inventory management strategies 

Managing inventory may seem simple at first, but it becomes more challenging as your order volume and customer base grow. 

Implementing the correct inventory management strategies can help you reduce costs, improve demand forecasts and prepare for the unexpected. 

Here are some proven inventory management strategies you can start implementing today.

– How to do the demand forecast in e-commerce

1. Automation of inventory management 

Manual inventory management is not only time-consuming but also error-prone.

Inventory records errors can send your entire company into a loss spiral as you can end up with huge inventory discrepancies and unhappy customers. 

Fortunately, there are many automation systems available for inventory management. Many of them are affordable and easy to implement into your ecommerce technology.

Inventory automation tools are designed to continuously track and manage your inventory across all sales channels and distribution centers.

2. Real-time inventory information

As inventory is constantly moving, having information updated in real time is crucial for you to be able to make decisions quickly based on concrete data.

This prevents, for example, having customers ordering items that are out of stock because your inventory records are not up to date. 

It also reduces the delay in ordering replacements, which can lead to late delivery.

Additionally, having accurate, real-time inventory insights helps your business establish a more agile supply chain. This way, if something goes wrong, you can still fulfill orders on time. 

3. Set reorder points 

Together with the real-time inventory tracking, many solutions offer the ability to set reorder points.

By analyzing historical inventory data to forecast demand, you receive information about how many units you need to order, when, and which reorder points are indicated.

There are a few other factors to consider when setting a reorder point, including delivery times and warehouse receipt.

 4. Maintain a safety stock

You never know when there will be a sudden increase in demand. Maybe an influencer posted about your product and suddenly you have thousands of people buying that item.

That’s why it’s crucial to keep a small amount of safety stock on hand (even in more than one location) to prepare for the unexpected. 

There is a simple formula you can use to calculate the amount of safety stock required: 

Safety stock = (Maximum daily usage x Maximum lead time) – (Average daily use x Average lead time)

5. Accurate demand forecast

Having an inventory strategy allows you to make faster decisions, which leads to an agile adaptation to market changes.

The more accurate your demand forecast, the better you can manage your inventory no matter what. 

Of course, demand forecasting is never 100% accurate, but anticipating how many orders you might have in the near future makes planning and investing easier.

By combining inventory strategies like demand forecasting and safety stock, you can easily maintain reasonable inventory levels. 

How to Develop Your Own Inventory Strategy

Keeping your business needs in mind, here are some ways to develop an inventory strategy that delivers healthier profit margins, lower costs, and happier customers. 

Inventory Check

If you manage your own warehouse, barcode scanning should be a vital part of the inventory management, as it helps keep things organized and generates inventory records. 

Inventory scanners can automatically read information encoded in product barcodes and send that information to a fulfillment system. This makes it easier:

• Follow up and manage SKUs in real time.
• Monitor stock availability.
• Identify where items are stored.

Inventory scanners help improve inventory visibility, especially when dealing with hundreds of SKUs. 

Furthermore, the use of this equipment can also greatly speed up the process of order fulfillment. 

– Strategies to speed up order fulfillment in ecommerce

Inventory Reports

With the right systems and processes in place, you can not only easily manage inventory, but also get accurate records of what you have in storage.

Inventory reports are crucial as they tell you a lot about the overall performance of your supply chain. And because inventory is an asset, you’ll need accurate reports to pass on to your accountant at the end of the year.

Believe me, these reports may seem like just extra time spent on paperwork, but they can save you a lot of money and unnecessary effort in the future.

Inventory Management

A critical aspect of your inventory strategy is covering everything from SKU to warehouse organization.

Especially when it comes to managing multiple products, you will need a strategy to track and categorize your stock, improve order accuracy and avoid stock shortages. 

Investing in inventory management software can help you streamline these efforts. 

Keep your inventory organized and speed up delivery

Having a well-organized stock is essential for companies that want to grow sustainably.

If you have an e-commerce business and don’t want to disappoint your customers, invest in a centralized warehouse management system that provides accuracy, transparency and full visibility into your stock levels at all times, right up to the second an item is being picked up.

This is essential so that products that are already out of stock are not sold and to facilitate and speed up the collection of the order for delivery, speeding up the entire process.

Furthermore, all you need is a delivery app to bridge the gap between your business, the delivery person and the customer.

The app Delivery365 was developed so that you can build your own e-commerce and product or service delivery solution.

Every time someone makes a purchase at your establishment, the delivery drivers registered on the app are notified, speeding up the entire process without you having to worry about contacting someone in person.

– What types of companies can use delivery services?

With a base of thousands of delivery people qualified to take your products to customers anywhere, at any time, it is a true revolution in the way you make delivery.

Visit our website and find out more!