Why use technology in e-commerce inventory management?
In the fast-moving world of e-commerce, businesses grapple with a high volume of transactions daily. As brands grow and sales soar, the back-office operations often lag, creating a bottleneck. This is where technology becomes indispensable. In an era where customer expectations are sky-high, and competition is fierce, having real-time insights into your inventory can be a game-changer. With the right inventory management software, businesses can automate many of their manual processes, making sure that operations are not just supportive but also scalable. It makes sure that as the brand and front-office sales grow, the operational backbone strengthens, enhancing the brand through informed data and decision-making.
What do you use technology for?
From tracking inventory levels in real-time to forecasting demand, technology is pivotal. Modern inventory management systems go beyond just tracking inventory. They help businesses optimise their inventory, reduce holding costs, improve cash flow, and enhance customer satisfaction. Inventory management software offers a centralised system to monitor stock levels, orders, sales, and deliveries. It integrates sales, purchases, and stock movement, offering a holistic view of operations. Moreover, it supports in analysing sales trends and spotlighting best-selling products, making sure businesses stay ahead of the curve. It’s also one source of the truth for inventory all around the world, and across various warehouse management systems.
How does inventory management fit in an e-commerce tech stack?
The tech stack you choose can significantly influence your growth trajectory. A well-integrated tech stack not only streamlines operations but also makes sure that businesses can scale efficiently and meet evolving market demands. While there are numerous tools available, it's crucial to select those that align with your business goals and operational needs. At the heart of this sits inventory management. Here’s our ideal e-commerce tech stack:
Shopify: Beyond being a digital storefront, Shopify offers analytics, marketing tools, and basic inventory management features. However, for more intricate inventory needs, integration with specialised tools like Unleashed is essential.
Xero: This cloud-based accounting software provides real-time insights into a company's financial health, ensuring seamless financial operations by integrating with e-commerce platforms and inventory management systems.
A2X: Catering specifically to e-commerce businesses, A2X simplifies the financial challenges of high volumes of e-commerce data, making sure it’s segmented into Xero in the right way.
Unleashed: A powerful and flexible inventory management tool, Unleashed offers a holistic solution for businesses to track products across multiple locations, manage sales and purchases, and get real-time stock visibility. Features like multi-currency support, manufacturing capabilities, and detailed reporting make it a robust tool for e-commerce businesses that need a granular understanding of their inventory.
Why spreadsheets don’t make good inventory management systems
While spreadsheets might seem like a cost-effective solution, they're ill-equipped to handle the dynamic nature of e-commerce. Manual data entry, lack of real-time updates, and human errors can lead to costly mistakes. Moreover, spreadsheets don't offer the automation and integration capabilities of a dedicated IMS. This means that tasks like inventory costing, which can be done at the press of a button with an IMS, become cumbersome and time-consuming. Platforms like Shopify, while excellent for sales, don't offer in-depth inventory management. Moreover, relying solely on basic tools can lead to stockouts, overstocks, and dissatisfied customers. And while Warehouse Management Systems (WMS) focus on volumes, they often lack a unified view essential for e-commerce businesses.
Advantages of using the right technology
Efficiency is just the starting point. The right technology offers unparalleled control, reducing risks associated with human data rekeying. With inventory management software, businesses can make sure that their stock levels are accurate, reducing the chances of stockouts or overstock situations. It also supports in reducing holding costs, improving order accuracy, and ensuring timely deliveries to customers. It ensures seamless integrations, providing timely insights for swift decision-making. Take Unleashed, for instance. It not only integrates seamlessly but also offers real-time data, making it an e-commerce favourite.
The art and science of inventory costing
Accurate costing is the cornerstone of profitability. As previously highlighted, with the right software, businesses can factor in direct and indirect costs, making sure that the landed cost of their products is accurate, and the pricing of their products is both competitive and profitable. By having a clear understanding of costs, businesses can set competitive prices, offer discounts strategically, and deliver healthy profit margins. Technology makes sure that this costing remains consistent, factoring in variables and offering a clear picture of true product profitability.
Building for scale
In the world of e-commerce, being set up to scale is not a luxury; it's a necessity. And technology is the bridge to that scalability. With the right inventory management software, businesses can make sure that their operations are streamlined, their data is accurate, and their decision-making is informed. In the ever-evolving e-commerce landscape, staying ahead requires more than just a good product; it requires smart inventory management powered by the right technology.