We all want to be in control. Especially when it comes to running an ecommerce business.
Having control over your inventory creates the foundation to running a successful business. This control helps you get the right products in stock at the right time, avoid costly stockouts and see how you’re performing. Sellers can streamline these processes through automated inventory management tools and cloud inventory management systems.
As new sales channels emerge, consumers and merchants are finding new ways to engage, connect and make purchasing decisions. Customers increasingly expect brands to meet them where they are. This preference makes it even more important to expand your business to the channels your customers use most.
More than half of retailers are investing in tools that allow them to sell anywhere, according to Shopify. Meeting this growing demand is challenging because you must pay attention to operations, multiple sales channels and new opportunities simultaneously. Tracking your inventory can become a moving target.
Inventory and customer experience are two of the most critical aspects for retailers to manage, and they are directly connected. If you don’t have the right product in stock when customers are looking for it, they’ll turn to another business that does.
Cloud system features can save time, reduce the risk of human error and keep your data clean and accurate. Automated processes replace manual work and enable a centralized platform to manage your inventory from a single location. All growing businesses should consider the benefits of an inventory management system, and even those that have systems in place should look to optimize their operations.
Before making changes to your inventory processes, review the key aspects of cloud inventory management systems, and understand the best practices for scaling your business using cloud inventory.
What are common challenges with inventory management?
Inventory management tracks products from acquisition to storage, order, transit, delivery and even returns. Retailers must manage inventory well to provide a great customer experience and maximize operational efficiency. Good inventory management leads to better forecasts and order handling while flagging potential issues before they become serious problems.
Rising consumer expectations and complicated market conditions have made inventory a growing challenge for businesses. Retailers can’t expect to source, stock and ship products independently, and many turn to third-party logistics providers (3PLs) for assistance. Enlisting 3PLs requires a coordinated approach across your inventory sources and channels to maintain control of inventory, orders and the customer experience.
New and expanding sales channels provide additional sales opportunities even as they add complexity to inventory management. Not only are you monitoring and addressing orders and issues across multiple locations, but sales patterns and demand can fluctuate between channels.
Proper inventory management helps prevent overstocking, stockouts, associated expenses, and missed sales opportunities. Accurate inventory levels contribute to better forecasts, which inform product decisions. When you add automated systems and workflows to this process, you can reduce the likelihood of human error.
Regardless of the systems and processes, all retailers need inventory management to keep the appropriate stock levels. Smaller businesses might manually count inventory and track product levels in internal databases or spreadsheets. Others may use software systems and hardware that require installation and on-site operation.
What are advantages of cloud inventory management?
Cloud inventory management software enables employees to access real-time information from anywhere while syncing data across all channels and locations. This provides an up-to-date overview of your operations and helps you avoid many common challenges associated with inventory management.
Cloud inventory management systems can add functionality and other benefits without sacrificing the power of traditional inventory management systems. For example, cloud-based inventory management software that doesn’t require a dedicated installation can be accessed from anywhere with an internet connection, such as a remote office or mobile device.
Virtual access to business operations has become more valuable than ever as environmental factors have often caused companies to shift the way they work. Remote and hybrid teams can access critical information and complete work without traveling to an office or warehouse. Cloud management can also help your business be more adaptable to change.
When your inventory connects to the cloud, data can be updated in real time, giving every employee an accurate view of what you have in stock and what orders are pending. When selling on multiple channels, having the latest information is crucial to ensure that you can meet dynamic demand.
Setup, onboarding, regular maintenance and security updates can be simpler and easier to manage when using a traditional system. Servers can also be better secured, as your provider will be responsible for investing in and maintaining the platform’s data and security. For many businesses, these efficiency features make cloud inventory management a great fit.
What are key features of a cloud inventory management system?
Finding and implementing the best cloud inventory management system for your business involves carefully considering your needs and how they align with a vendor’s tools and features. Here are features commonly seen in cloud-based platforms.
Inventory syncing in real time across locations
You need insight into all of your inventory, regardless of its location. Select a platform that connects to your sales channels and offline locations, such as warehouses. Customers want to shop when and where it’s most convenient for them, and your ecommerce operation needs to meet that need across channels.
The more sales channels you use, the greater the opportunity to make meaningful connections with new customers. But you’ll also need to track inventory moving from multiple locations. A sudden increase in consumer demand, such as a peak season rush, can move inventory quickly. Your cloud inventory management system must be able to respond to those shifts quickly and replenish stock levels.
Low stock notifications
A cloud inventory system can set stock thresholds that trigger automatic alerts and even initiate reordering. This saves time compared with manually tracking inventory levels, helps you get ahead of potential stockouts and prevents frustrated customers who can’t complete orders.
Some inventory management platforms, such as Linnworks, allow you to analyze products and locations by supplier and generate purchase orders as soon as you reach designated reorder points. When product availability or shipping windows change, reordering points can be adjusted. This combination of automation and flexibility can also help you mitigate supply chain disruptions.
Modern ecommerce sellers need insight into and control over incoming and outgoing orders to effectively monitor inventory levels and create accurate forecasts. When you have real-time, precise order tracking information, you’re better positioned to replenish stock, track product availability and adjust to market changes. Accurate order tracking features help you fulfill orders in a timely fashion and keep your business operations running smoothly.
Cloud inventory management systems can pair real-time inventory data with historical sales data, seasonal trends and sales of similar products to help with inventory planning. This can be incredibly useful when monitoring consumption data across key selling channels, especially during busy seasons.
Accurate demand forecasting not only helps with inventory but also helps with areas such as marketing. With strong forecasts, for example, you can toggle between paid marketing and organic marketing depending on the selling period.
Integrations allow you to expand the functionality and reach of existing systems while keeping data centralized and accurate. Some integrations can help manage your business across multiple sales channels, such as Amazon or Walmart, while others offer additional services or functionality. You can even integrate your inventory management system with major carriers, third-party logistics fulfillment centers or Fulfillment by Amazon, for example.
Managing your inventory operations from a centralized platform can create access to in-depth, one-stop reporting and analytics tools to measure performance and make data-driven decisions. When you use a centralized cloud platform to manage your inventory, orders, fulfillment and other aspects of your ecommerce business, your data is more accurate and up to date.
Customized reporting features can allow you to drill down to the metrics that matter most to your business, such as stock history over time or key channels by date and fulfillment partner.
Data and security
All organizations should prioritize data security to protect customers, partners and their operations. Updating legacy inventory management systems with security measures could create costly downtime and require manual oversight, leading to errors. By contrast, cloud inventory management systems can be regularly updated or patched to stay ahead of the latest threats.
Another consideration is how and where you back up inventory data. Hackers can target your systems to access and steal data, disrupting business activities and hurting your reputation. Meanwhile, physical damage, such as a fire or other natural disaster, could destroy information only stored on-site. Fortunately, cloud-based systems can automatically back up your data in real time and store it remotely.
Even the best inventory management systems used by the most successful companies can require additional support. Review the available services offered by your provider to ensure they can meet your needs. Onboarding and training services can help you get started with best practices. Ongoing support is also crucial. High-quality vendors offer features like live chat, one-on-one support, knowledge bases and community forums.
Optimize cloud inventory management
Inventory management is an ongoing process as you adapt to new technologies, expand your sales channels and monitor the competition. That’s not a bad thing, however. Think of optimizing your cloud inventory management as a journey where you continue to improve as your business grows.
Cloud inventory management can help you create a more efficient and productive ecommerce business while freeing up time to optimize operations. The combination of cloud and automation reduces the dependence on any one single location and the amount of manual work required — all while enabling you to spot issues quickly.
Having a real-time view of your entire business allows you to scale without needing to be everywhere at once. A centralized platform for your ecommerce operations can be the missing piece to the inventory management puzzle and drive success for years to come.
Inventory management systems are vital to providing an excellent experience for your customers, employees, and entire supply chain. Cloud inventory management takes this to another level, helping you keep the inventory cycle moving and deliver the best possible experience to your customers.