Being an ecommerce marketplace seller is not an easy job. You are sandwiched between marketplace regulations and ever-increasing customer expectations for superior buying and fulfilment experience. Thankfully, many of the roadblocks and issues plaguing ecommerce marketplace inventory management can be easily resolved by establishing a solid inventory strategy from day one.
Understanding Marketplace Inventory Management
Inventory Management is the lifeline for marketplace sellers since the success of the business hinges on delivering the right order to the right customer at the right time.
Here are some of the basics of inventory management you should be aware of before starting your journey as an ecommerce marketplace seller :
- Organize Your SKUs – Stock Keeping Units (SKUs) are essentially unique identifiers assigned to each of your product to streamline the ordering and logistics process. SKUs can be customized as per your wish but they are typically categorized based on product, category, popularity etc. The first step in establishing an effective inventory management system is to have a simple and well-structured SKU system in place.
- Focus on Product Types – In order to ensure a seamless workflow and minimize time wastage, you should have a thorough knowledge about the product type you are selling on marketplaces. Here are the major product types that ecommerce marketplace sellers usually deal with :
– Item : An individual product or an item that doesn’t require any special storage or shipping considerations
– Case pack : A group of usually similar items clubbed together. They might require special attention during storage
– Assembly : These are items that require assembling multiple parts scattered across your warehouse before shipping. Based on your sales forecast, you will need to organize them based on individual parts or end products
– Family : Similar products that have variations on colour and size. These will also need to be grouped based on your sales and demand forecast
- Get Serious About Demand Forecasting – Use historical data and other demand forecasting techniques to prevent negative sales impact like stock outs. Also, pay close attention to your sales analytics to understand the rise and fall in demand for your product. Make sure to take into account seasonal variations and other customer behaviours that will impact the sales of your product.
- Have a Backup Plan – Even the most experienced ecommerce sellers will not be able to predict product demand 100% accurately every time. At some point or the other, a random occurrence or event will disrupt even the most the most watertight strategy. Smart sellers should thus always have a backup plan in terms of surplus inventory of bestselling products or a reserve supplier.
- Ensure Data Accuracy – Ultimately, inventory management is a case of numbers and data and even minute discrepancies can have a severe impact on your business. Some of the common but easily avoidable mistakes include adding multiple SKUs into a single slot andcounting case packs as a single item instead of the individual pieces
Get these inventory management basics right and you will set forth your ecommerce marketplace business on a solid footing.
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