Inventory management challenges that many merchants struggle with

Inventory Management

Inventory management has always been a difficult task for retailers, as it requires an immense amount of record keeping and forecasting to ensure warehouses are always adequately stocked and prepared for what lies ahead. Although the rise of eCommerce solutions have made inventory management less of a challenge over the years by helping them automate the painstaking process, it’s still incredibly important that merchants remain focused.

Here are three inventory management challenges that every retailer faces:

1. Having too much stock

Retailers never want to miss out on a sale, yet that’s exactly what may happen if they don’t have any inventory. Unfortunately, this fear often instigates the opposite problem: Causing them to procure too much stock. Storing more products than necessary is expensive because it means retailers have to buy or rent bigger warehouses, it can also result in crowding issues. Moreover, if this excess isn’t sold, it turns into frozen capital that merchants don’t have direct access to. In addition, merchandisers may even have to sell it at heavy discounts to recapture a part of their investment.

As Entrepreneur magazine noted, the best way to avoid having too much inventory is simply improving forecasting and projections.

The best way to avoid having too much inventory is simply improving forecasting and projections.

“The best gauge is what you’ve sold in the past,” explained Entrepreneur contributor Lisa Girard. “If you’ve sold 100 items per month for the past 12 months, chances are that you’ll need 100 this month. Then there’s seasonality: Do you usually see a fourth quarter spike with holiday sales? Or, if you’re in the home and garden business, do you see more activity in the spring selling season?”

2. Poor tracking

One of the ways to avoid purchasing too much stock is through deft forecasting, but that in itself can be a major inventory management challenge if retailers aren’t properly tracking product levels in the first place. Merchants unsure of how much inventory they have at any given moment will also struggle to place adequate orders and refill stock on time.

To make matters more difficult, the rise of omni channel shopping has made accurate inventory tracking across channels a huge obstacle. In years past, retailers were able to isolate their various retail channels, which made inventory tracking much easier. However, with many merchants offering features such as buy online and pickup in-store, the pressure is on to keep accurate inventory records at every interaction point to avoid costly outages or excess purchases.

In that regard, eCommerce solutions capable of automating inventory management and order fulfillment can go a long way. The less number crunching left for employees, the less opportunities for human errors exist. By utilizing the right eCommerce solutions, retailers are also better able to improve transparency with real-time reporting.

3. Use of legacy solutions

Inventory management is a complex task, but the rise of new technologies and eCommerce solutions has made it less of an issue. That being said, new software and platforms are being released on a rolling basis, which can make inventory management even easier.

However, if retailers get stuck using legacy systems and solutions that don’t allow them to capitalize on new advancements, they may fall behind the curve.

eCommerce solutions capable of automating inventory management and order fulfillment can go a long way.

Merchants need flexible eCommerce solutions that allow retailers to customize their solutions to help them address whatever inventory management challenges they may face.

Inventory management has long been a challenge for retailers, but with the right strategic approach and the appropriate solutions, they can streamline this process significantly.

Related Articles

Three Inventory Management Best Practices

Leave a Reply

Your email address will not be published. Required fields are marked *