One of the things every online store owners needs to manage is inventory. Getting this right will lead to increased profits. Getting it wrong will lead to wasted money, time, and opportunity. It’s impossible to know exactly what you will need to keep in inventory at first, so this is an area where you will need to learn as you go. As you get better at understanding inventory cycles and management, you’ll know what to keep in stock when and how to clean out your stocks periodically to make room for new, fresh products.
Gather Data for Inventory Management
In order to manage your store’s inventory for optimal performance, you need data. Start tracking what products sell and where customers come from. Over time, you will start to see trends and cycles in what is purchased when. If you know there will be a spike in sales at a particular time of year, you can be prepared by ordering more stock. Such cycles may run along traditional retail cycles, such as during the holidays. But you may also see your own trends develop depending on what products you sell. If you focus on products for outdoor sports, for example, you should see sales ramp up in the spring as the weather gets warmer and people start enjoying more outdoor activities. If you sell clothing, you will definitely see sales cycles throughout the year as seasonal wardrobes change. These cycles will help you plan your ordering and inventory liquidation appropriately.
Clear Out Old Stock
Now and then you will need to get rid of stock that isn’t selling. If you are lucky you won’t have to deal with much of this, but every store has items which simply do not sell. Keeping these in your store takes both physical storage space and space on your online storefront that could better be used for new items. Customers like to see new products cycle through. Having the same old unsold items cluttering up your listings will have a negative impact, as customers get tired of seeing these old items which they’ve already decided they are not interested in.
There are multiple strategies for inventory liquidation when you need to clear out old products. Sales are an obvious first step catch any customers who are interested in those products but not at the original prices. Make sure you run advertising to garner attention for the items you want to get out of your store. For items that don’t sell, you can have a special deep discount sale once or twice a year to try to get those items out. You may need to sell at a loss, but if you can recoup any of the cost at all it’s better than nothing. Bundling items together can be a good way to move products that aren’t selling, especially if you can make good product matches that your customers didn’t see for themselves. Finally, look for shops that take on old stock from other stores to sell at a discount. This is another way you can recoup a little bit of the cost of your inventory while clearing out space.
By managing your inventory well, you can make the most profits while minimizing losses. You want to make sure you have sufficient stock available so you can sell to everyone who wants an item when they want it, as having to wait for back-ordered items will chase some customers away. But you also want to avoid investing money in too much stock which you will need to sell at a loss. Over time, if you track your data, you will be able to keep this balance and make the most profits possible from your online store.
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