Starting an online business has become a very effective model. Since before the pandemic, the use of e-commerce was on the rise; in 2019 alone, 1.92 billion people made purchases through this medium worldwide, according to data from Statista. And by 2021, it is estimated that the figure will increase to 2.14 billion.
This growth of approximately 11% in just two years is due to the boost e-commerce received during 2020, as, for many, buying online became the only alternative to the confinement measures by Covid-19.
There is no doubt that this form of consumption is here to stay. You can use new formats and digital channels to set up an online store, such as social networks, marketplaces, or own stores. However, there is a challenge in all of them: inventory management.
Having a varied and available stock to meet the demand might become a challenge, especially if you don’t have the capital to supply it. Financial products such as merchant cash advances, business credit cards, or loans offered by institutions will allow you to get everything you need to set up your business and stock your product catalog.
Here are four best practices for smooth inventory management to help you practically achieve your financial goals.
1. Use specialized inventory management software
When managing stock, there is no worse enemy than pen and paper. No matter how organized you are, handwritten notes can get lost and create chaos in your warehouse. Nowadays, several inventory management software allows you to maintain a punctual control of inputs and outputs, production, materials bills, and suppliers’ orders.
Tools like Fishbowl or Netsuite help you manage your inventory through barcodes to facilitate control. It also allows real-time data generation to monitor when you are about to run out of stock. This type of software costs more than US$4,000. If your budget does not include this investment, rely on the offered financial products such as Camino Financial.
2. Perform product and sales analysis
No matter how you manage your inventory, constantly analyzing your sales is a priority. This way, you will know which products sell the most, generate the most profit, and involve more complicated delivery logistics.
By analyzing this information, you will optimize and get the most out of your inventory. You can use the ABC method to prioritize in three categories:
A – High-value products with low sales frequency
B – Moderate value products with moderate sales frequency
C – Low-value products with high sales frequency
3. Establish minimum stock of each product
One of the biggest challenges for online stores is identifying in real-time the stock of your products. It is useless to bring potential customers to your e-commerce; if your products are out of stock, this can generate a bad reputation for your brand, avoid it! Define a minimum stock for each product, according to demand. This figure will depend on your ABC analysis and the past sales of each item.
Don’t let a lack of capital stop you from supplying your inventory. Use business loans such as those offered by Camino Financial or access specific financial products such as merchant cash advances to generate your investment.
4. Attending to market trends
All market niches move in different ways, either by trends, fashion, social situations, or season. Don’t stock up on sweaters during spring! You can use the Google Trends tool to find out the most popular searches.
Planning and analysis are the essential keys to generating a short-term ROI. Do not put your assets at risk; the best alternative is to invest through commercial loans or financial products such as merchant cash advances.
E-commerce does not require a physical point of sale and generates revenue 24/7 (even while you sleep). Use these advantages to your benefit and optimize your inventory to increase your income. Use alternatives such as friends and family loans, commercial credits, merchant cash advance, or the financing that suits your needs to achieve the entrepreneurship of your dreams. Are you ready to become an entrepreneur in digital commerce?