Top stock control methods to master inventory management
- •What is stock management?
- •Why is stock management important?
- •Our stock control tips for better inventory management
- •#1: Know your minimum stock levels
- •#2: Optimise your storage processes
- •#3: Crunch the numbers
- •#4: Audit your stock regularly
- •#5: Have a good stock management system in place
- •#6: Be good to your suppliers, and they’ll be good to you
- •Running a tight ship starts with how you manage your stock
For e-commerce businesses, your success relies on how efficiently you manage your incoming and outgoing stock. Having the right inventory management techniques in place enables you to run a more efficient business, save money, and empowers you to grow your business more effectively.
What is stock management?
Stock management is everything involved in managing your stock and inventory. It involves selecting your product lines, sourcing your products, managing stock levels, how you re-order, how your customers order, storage, tracking & returns—the whole show.
And how you manage your stock has a big impact on your business.
Why is stock management important?
It helps improve forecasting
Effective stock forecasting and efficient inventory management techniques go hand in hand. Having good stock control methods in place means you’re able to get accurate data on all your incoming and outgoing stock, best sellers, storage costs, and seasonal sales figures. You’ll be able to log accurate, granular data about all your products and business processes, meaning you’re better placed to plan your business’ future stock needs.
It’s an efficiency cycle. The more accurate data you gather for forecasting, the better prepared you’ll be the same time next year, and the more efficient your stock control methods will be.
You’ll reduce wastage
Unsold stock sits in your storage space, taking up room that could be used for new stock, tying up your business’ capital until it gets sold. It sits there, costing you money that you’re not making back. And if it never gets sold, it just turns into a waste of money and eventually a loss.
Efficient stock control methods allow you to use your historic data to determine exactly how much stock you need to order, and when. Which means no more over-ordering.
You’ll reduce the amount of storage space going to waste and stop losing money on stock that ultimately never sells.
It helps improve your cashflow
The right inventory management techniques enable you to manage your cashflow in a much more efficient manner. Think about it this way, your stock is a collection of assets that your business has purchased. They sit in storage until they’re sold. So if you’re not selling them, or you don’t have enough to sell, then you’re effectively losing money, causing a gap in your cashflow.
Managing your stock efficiently means you have the right volume of stock leaving and entering your business, smoothly rotating across your shelves (metaphorically or otherwise). You’ll be able to manage how much you’re spending on re-ordering, maximise your storage costs, and you’ll be able to make calculated forecasts on your income.
When it comes to keeping your financials in check, Airwallex is the business account of choice for Aussie e-commerce businesses. With the ability to make same-day payments to your suppliers and logistic providers in multiple currencies, without excessive fees or hidden exchange rates, we’ll help you manage the financial side of things.
There will be no gaps in your income, no unexpected new stock costs or bills to pay; your business will run like a well-oiled machine.
It helps you provide a better customer experience
Employing good inventory management techniques means you’ll always have the right amount of stock available. You’ll always know what you have, and how much, so you can easily answer any customer questions, and they won’t have to worry about waiting for new stock to arrive.
You’ll be able to run your business efficiently, meet customer demand, ship your products quickly, and keep your customers coming back.
Our stock control tips for better inventory management
As your business grows, employing the right stock control methods can make all the difference between a smooth, efficient business, and operating in an environment of barely-controlled chaos.
Here are our top stock control methods you can employ as an e-commerce business to tighten up your cashflow, reduce your wastage, and streamline your business.
#1: Know your minimum stock levels
Knowing and understanding your stock levels is one thing—but knowing your minimum levels of stock is where you’ll really be able to take control.
By understanding the minimum amount of stock you always need on hand you’ll be able to easily tell when it’s time to re-order more. By having a clear minimum volume, you can put processes in place to re-order more stock when this number is reached. It helps you automate your ordering process, so you never run out of stock, and you can take one more thing off your plate.
#2: Optimise your storage processes
For any e-commerce businesses, good warehouse management makes your operations run smoothly. This extends down to how you store your products.
Whatever sized storage space you have, make your stock easy to get to; don’t pack smaller items below or behind larger items where they’re harder to reach. When receiving new stock, don’t just shove more products into your warehouse; pack them neatly.
It’s always wise to operate under a First In First Out basis: older stock gets sold first, to make way for new goods. This ensures your products don’t sit around gathering dust, being crushed under larger packages, and you won’t be stuck selling out-of-date products.
Efficient storage management makes the fulfilment process that much easier.
#3: Crunch the numbers
As a business owner, don’t be afraid to really dig into your sales and stock data, and get nerdy with it. Find out what’s selling, what’s not, and look at the numbers around these numbers.
Analysing how fast certain stock moves allows you to determine where different sales tactics can be used. Some items may need to be discounted, some might be sold as bundle deals.
So crunch the numbers, dig into your data, and learn what makes your business tick. This empowers you to make smarter choices in your ordering and storage, and lets you generate more accurate data for your forecasting.
#4: Audit your stock regularly
Regular checks of your inventory lets you have a firmer grasp on your business. By regularly auditing your stock, you’ll ensure you’re receiving the right volumes and the right products.
A few missed pieces here or there, one or two defective products, these costs add up. They can put your numbers out, deliver incorrect reporting data, and even make you lose customers.
Performing regular audits of your stock and spot checks of your inventory, ensures you see with your own eyes that your business is running smoothly.
And when reconciling your stock volumes against your orders, good inventory management software is invaluable.
#5: Have a good stock management system in place
Businesses grow. Where you started off by using a simple Excel spreadsheet to track and monitor your stock—it may have even been a notepad and pen—you’ve likely now outgrown this method.
Spending the money and investing in a good inventory control database ensures you can quickly and easily manage all your incoming and outgoing stock, and always know what you’ve got available.
Inventory management software is pretty clever these days. You can set up low stock alerts, automate customer returns, and even your re-ordering. And with the rise of cloud computing, you can access your stock management software from anywhere in the world, allowing you to maintain efficiency wherever you are.
Two leading eCommerce inventory management platforms for Australian e-commerce businesses are Dear Inventory and Neto. Both provide powerful cloud-based features such as automated forecasting, ordering and dashboards to help you master inventory management.
#6: Be good to your suppliers, and they’ll be good to you
Businesses are built on relationships, and maintaining positive working relationships with your suppliers is critical to managing your stock.
Now, this doesn’t mean you have to be best friends with them—it just means being communicative, clear, timely, respectful, and reasonably friendly. Pay your invoices on time. Always give a heads-up if your stock levels are likely to change. And treat your suppliers with basic human respect.
By building this goodwill, they’ll, in turn, be more likely to help you out in a tight spot, and keep your business running smoothly.
Running a tight ship starts with how you manage your stock
By taking note of these inventory management techniques, and actively using them in your business, you’ll be able to create a more efficient, more streamlined e-commerce business.
With your stock management in control, you can focus more on the future, and the exciting growth your business has in store.
Related article: How to Price and Promote your Product for International Markets