Stock Management Tips for Online Businesses

All businesses incur losses because of problems associated with stock management, and a major part of the cause can be attributed to ‘shrinkage’, which involves customer theft, as well as mistakes by staff and the administration.

There are a number of ways in which you can arrange for stock management for online businesses. Here are some tips and tricks to reduce shrinkage and also expand online business.

• Stocks should be checked inwards: you should always focus on what you have ordered from the supplier and what actually is delivered. Many people assume things are in order because the process is documented, but in actuality about 1-2% of stock is incorrectly packed. This will cause an embarrassing moment for when you receive a customer order and find yourself short in stock.

• Products should be stocked in an intelligent manner, so that distinct labels stand out from others.

• Naming of products also assumes paramount importance. Pay special attention to what size of product the customer has ordered, and follow through, even if it means altering the packing slips. Loss in credibility is hard to digest.

• Keep an eye out for expiry dates of perishable products, and also line up your stock in such a manner that they are despatched in time. A good method of doing it is creating a reminder list for each of the product lines, so that remaining stock can be shifted and also which ones need to be taken off the website because of expiry dates. Stock management for online businesses also involves checking Best Before dates prior to packaging.

• It might happen that you ship the wrong products to a customer, but as long as you amend it by stocking relevant products, confidence in your brand is restored, an apology letter also helps in these cases.

• It is a good idea to set minimum stock level for your suppliers, who may be more than one. Try to ascertain the delivery tie of stock from a particular supplier and give yourself a certain amount of buffer stocks to tide over the times when supplies are low. Some suppliers less demanded items and these could be good for leveraging the transportation cost entailed per unit.

• The Wilson EQQ Model: this formula is used to optimize order sizes for an inventory. It is used by most business owners for stock management.

• Returns are another headache for companies, in these cases you have to ensure the labelling is intact, especially in electronics goods and fashion items, and if the items are defective then you need to sort it out with the supplier.

• Regular stock checks are imperative to keep a close eye on operations, and spot checks are a good method for Stock management for online businesses. Understandably you wouldn’t have the time to go through the entire stock, but rotate it randomly to see if there are discrepancies.