Today, mobile commerce is one step ahead of e-commerce. In this scenario, how does a retailer, primarily selling through mobile applications, manage inventory?
We’ve asked ourselves this question, and while the basics of inventory management remain the same, the processes could change a bit.
In this article, we talk about 10 tips that can help every m-commerce retailer save time and money through seamless order processing and inventory management.
1. Don’t go ‘Out of Stock’
M-commerce is all about instant gratification. In such a scenario, backordering is probably a bad idea. Why?
Because someone purchasing on a mobile device is buying on impulse, meaning that the process of fulfilling their order needs to keep pace with their impulse.
If you run out of stock for a product and accept a backorder, you will be adding a good week to the fulfilment time, depending on how fast your vendor can ship products to you.
This is ample time for someone who has made an impulse purchase to change their mind. The simple solution to this problem is to maintain adequate safety stock that can help you sail through a stock out period.
2. Let Go Of Spreadsheets
Does your business still use spreadsheets to manage inventory? This is a very archaic practice and you should do away with it immediately.
Spreadsheets are only ever updated by the people in charge of them, and even if they forget to do it once, your inventory count is thrown out of whack.
Using an inventory management system can help you sort this problem. For one, a system integrates with your sales channels directly and keeps your inventory levels up-to-date. It also raises an alert each time stocks run low so you can do the needful.
You save money by preventing stock-outs, which expend one of the most valuable currency in retail – trust.
3. Do A Stock Audit
When was the last time you performed a physical count of all the goods in your inventory?
FMCG retailers do this weekly, or even daily in some cases. Even if you don’t sell products that are FMCG, it is important that you count your stock systematically.
For one, this helps you understand any stock loss due to theft and damage. Also, it helps you reconcile the book value of your stock to the actual value and write off any losses.
4. Don’t Depend On Hardware
For an m-commerce retailer, the mobile device is everything.
Until it breaks, that is.
Imagine storing all of your inventory data on one or two systems, only to have them damaged for no fault of your own. Not only is your entire product catalog lost, you also lose all data on stock levels.
Today, most inventory management systems are cloud-based, meaning that they are available on any device and platform, and protected with a password.
Even if you’re on holiday and forget to take your laptop along, you can access cloud systems on another device by keying in the right ID and password. Your data, too, is safe because it resides on a remote server.
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5. Consider Vendor-managed Inventory
In the fast pace of online sales, you might simply forget to raise purchase orders for more stock on time. One way to avoid this is to set up your purchase orders to be raised automatically in a given frequency.
Another option is to let your vendors monitor your average order timelines and keep shipping stock at periodic intervals. If you’d like to stop a certain order, you need to give them a few days’ notice.
By turning your attention away from supplies, you can turn your attention to demand, and thus make more money by paying attention to potential customers.
6. Look At Your Order Fulfilment Process
Inventory management does not happen in a vacuum. For one, all orders placed need to be fulfilled from the existing inventory. Moreover, whenever someone returns a product, it goes back into your inventory.
Hence, how you fulfill orders plays a major role in deciding how well you manage your inventory.
You need to ensure that the speed of order fulfilment and return processing, always remains high to match up to the speed at which a customer might raise a return/replacement request on your mobile app.
7. Try & Minimize Your Losses
Losses in retail are common. On the inventory storage end, ensure that risk of theft and damages is minimized. You can do this by installing security cameras and making it a practice to count stock often.
Sometimes, even too much stock can be a huge burden. After all, you don’t want to spend all your working capital on a warehouse lease!
If you’re stuck with too much of a product, the best thing to do is to host a sale, or bundle it with another fast-moving item. That way, you build goodwill and lose that excess inventory bulge at the same time.
8. Know Your Inventory Management Style
For some businesses, it works to store some stock, mostly as a safety against vendor delays, or when this stock further serves as a raw material for making something else.
For other retailers, Just-In-Time Inventory management kicks off seamlessly and they never have to worry.
For most however, some amount of excess inventory, or low stock levels, are a common issue. One way to fix this is to go about inventory management in a mathematically sound manner.
So, instead of just estimating numbers, you actually calculate how much stock you need, when and in what proportions using past data.
Decide which of these approaches works for you. The calculation approach is highly recommended for those facing issues with estimation.
9. Suggest Relevant Products
Product suggestions are not just a great way of selling more, but also to move more of your inventory at the same time.
In your mobile app, include a section for suggested products based on what else your consumer is browsing/buying.
The purpose of inventory management is rather simple – keep it moving. As long as you can do that, you’ll save a lot of money, and also sell better.
10. Make The Most Of Integrations
If your m-commerce app developer/service provider offers inventory integration, grab it without a second thought. A single interface for all business needs is always the best option. It reduces the margin for error significantly, and also saves you time and money.
When that is not possible, look to invest in a good inventory management system and set it up to export your sales channel data automatically.
That’s about it! Keep an eye on the stock out situations, and you’ll see that it all comes down to handling your inventory better.
With the speed at which people make a purchase decision on mobile devices, and the rate at which you need to fulfill orders, there’s every reason to do so, and save yourself from preventable losses.