Skip to main content

How to Manage Inventory Properly

To grow your business, you need to first streamline your existing processes so that you are confident that your business can handle the strain of increased sales volume. Too many businesses make the mistake of scaling up too quickly, without the necessary systems in place to process an influx of orders, customer service requirements, and most importantly large-scale fulfillment. You might think that there’s not much difference whether your online store or ecommerce platform processes 5 or 50 orders per day, but executing on an additional 45 orders a day will test how well you’ve set up your systems.   

What is a 3PL?

Managing inventory and fulfillment processes is one of the most challenging tasks for a growing business, and very often business owners choose to outsource this to a third-party fulfillment center. These fulfillment centers, also known as third-party logistics providers or 3PL’s, are sometimes processing thousands of orders per day. This lowers their fulfillment costs considerably, and also makes things like expedited shipping a possibility. With these lower costs and additional services, you can improve your customer service and get better profit margins simultaneously, growing your company’s efficiency and footprint.

Find Your Match

Ensure that you use a 3PL that understands your business model, whether that be eCommerce fulfillment for an online retail business, getting your crowdfunded product to backers all over the world, or sending out a monthly or quarterly subscription box to your eagerly awaiting subscribers.  

Partnering with a logistics provider that takes care of all the facets of the fulfillment process makes it easier to manage and lowers the cost. You also reduce the risk of redundancy and error by trusting one company instead of partnering with several. Ensure that they provide customer service and have enough warehouse space that is climate-controlled if you need it. You might also need them to do kitting and assembly, which is when several items are grouped and repackaged to be sold as one unit in the case of a special promotions or deals. EWorld Fulfillment provides all these services and includes a cloud-based inventory management system that integrates to your eCommerce platform.

Inventory Management Software

Warehouse or Inventory Management Software has become an essential part of ecommerce fulfillment. EWorld Fulfillment uses 3PL Central, a cloud-based SaaS application to monitor and run all their activities. Make sure that you have 24/7 access to your warehouse or inventory management program, as this is crucial in the eCommerce industry that literally never sleeps. From here you can manage the influx and outflow of your stock throughout the inventory management lifecycle. You can also check stock levels from day to day to predict demand and never get caught off-guard and run out of stock.

Key Aspects of the Inventory Management Lifecycle

Storage: Depending on the demand for your product, you may need to store your products in several different locations. If you sell perishable goods for example, it will help to have stock available in different parts of the country for quick delivery, and the warehouses will most likely need to be climate controlled. This will increase efficiency and keep your shipping costs low, even if it raises your storage costs slightly.

Inventory Management System: Apart from storing your products, you will also need software that integrates the warehouse logistics with your online store or eCommerce platform. This way orders can be automatically routed to the best warehouse location to check stock availability and expedite shipping to your customer. You will also see which locations require more inventory and adjust the storage accordingly.

Picking and Packing: The warehouse will have the necessary staff to pick and pack your products and prepare it for shipment to your customers. If you have special promotions, the warehouse will also take care of any kitting or assembly that needs to occur before the order is fulfilled.

Freight Forwarding: Once the order has been prepared, the warehouse will transfer the package to a carrier that delivers it to your customer. For maximum efficiency, all these systems are integrated, and you’ll be able to see where the package is in the process at all times.

Order Tracking: To provide excellent customer service, it is best to inform your customer of all the shipping details as the order proceeds through its lifecycle, so that they know when to expect their delivery.

Returns: If a customer needs to return a product for an exchange or a refund, this same process takes place in reverse. It is crucial that all the information flows back into your inventory management system in the warehouse and your online store so that you have up to date information regarding your stock levels. In the case of damaged or faulty products, it will be very valuable to see how many products are defective and wherein the process this happens, so that you can avoid it in the future.