Your Complete Guide to an Accurate Inventory Count Across All Sales Channels

By Chad Rubin

Inventory management is a crucial element of running an ecommerce business, but it can be one of the most difficult and technical parts of the job to learn.

The simple process of keeping track of goods purchased and sold is complicated by costs, overhead, rate of sale or turnover, cost of purchase, and other details that can be difficult to manage as your online sales grow.

However, you need accurate inventory management to maintain the profitability of your store, as inventory carrying costs can represent as much as 25% of your inventory value.

In addition, poor management, which results in out of stock events and overstocking, can be costly.

Overstocking means you could get stuck paying for storage and management for items you might never sell, while selling out loses customers, can slow shipping time, and reduce customer satisfaction.

This is especially relevant for Amazon sellers, whose listings and Amazon SEO will plummet if a product is out of stock.

Maintaining an accurate inventory count allows you to manage reorders, keep just enough inventory in stock to meet demand, and reduce costs by understanding your sales and losses.

While there are numerous elements of your inventory that will require care, you can start by ensuring that your physical inventory counts are accurate, so that the rest of your data is correct as well.

How to Physically Organize Your Inventory

The first step to accurate inventory counts is simply organizing your inventory. While very small ecommerce stores often skip this step, it becomes more and more crucial as your inventory grows.

Organization allows you to understand what you have, how you are keeping track of it, and gain a better understanding of your data once you perform a count.

The first element of organizing your inventory should almost always be physical organization.

  1. Label bins
  2. Create a structured order
  3. Integrate an inventory movement system such as “first in, last out” or “last in first out.”

This will enable you to track where items are in your warehouse and handle counts more quickly.

Great organization necessitates a quality inventory control system comprised of detailed labeling and naming.

Inventory Labeling

Using physical labels gives you the opportunity to improve the accuracy of your inventory count using technology like barcode scanners. Even if you manufacture all your products yourself, you should have a physical labeling system that matches your digital inventory count.

Your label should include:

  • SKU (Stock-Keeping-Unit)
  • Measurements
  • Location, if applicable

Inventory Naming

You need quality, organized inventory names to track and manage your inventory and stock levels. In most cases, this means using or creating SKU numbers to track your internal inventory while adopting and using other technology for efficiency and retail sale.

You also need actual product names, which should be descriptive based on product type, size, color, etc.

Many of us are tempted to create product names that are semantic, but good inventory management means creating titles that are searchable.

  • Semantic: Blue Chuck Taylor Converse Shoes
  • Searchable: Converse, Chuck Taylor, Blue, Size 8.5

Why? If you’re attempting to perform a manual update and you’re using “Blue Converse Shoes,” your shoes would be located under “Blue” and Go to the full article.

Source:: Business2Community