Managing ecommerce inventory for your business can take a lot of time and resources if you don’t have the right ecommerce platform and inventory management strategy to streamline the process. Once you have determined your supply chain, what you need for shipping and inventory optimization for ecommerce, it’s time to check out management software options and make a plan to cover the costs and grow your business.
What Is Inventory?
Inventory refers to the items your business sells and currently possesses. These are the tangible goods and services you sell to your customers. They can be the raw products you catalog, goods that are in production, or the finished products. If you have an ecommerce business, your inventory is generally the latter. The inventory stock is a business asset. It’s either stock on hand and ready for sale or soon ready for sale.
Here’s a quick example of why poor inventory management is a danger to business owners. You have 100 gizmos and sell 13 of them. How many do you have left? Hopefully, you’re not regretting missing that day is 3rd grade when they covered simple math.
Let’s say you have 100 gizmos and receive an order for 13 gizmos, and you’re drop shipping 4 of them tonight. How many gizmos do you have in inventory? It is specifically for the second example that you need an inventory tracking and management solution. You need to know that you have 96 in inventory in this example vs. 87 in the first one.
The reason inventory is essential is that it’s not only a tangible asset, but it also provides real-time insight into the company’s revenue. If the ecommerce store isn’t selling products, it’s not generating income. Without inventory software that offers inventory management solutions, the ecommerce business owner runs the risk of losing significant money.
Here is another simple example. An online grocery store that sells milk may order 100 gallons of milk on a given day and sell 90. At the end of this day, the store would have 10 gallons of milk in their inventory for the next day. If they wish to start again with 100, they would only need to order 90 gallons for the following day. While the example may be simple, without a way to track inventory and managing inventory stock levels that automatically update, you run the risk of getting into financial difficulties.
What Is Ecommerce Inventory?
Ecommerce is conducting business over the internet. It’s not enough to have your web site’s online store, shopping cart, inventory control, payment gateway, and ecommerce blog ready to go. In order to be one of the many success stories, you need at least minimum stock levels. Ecommerce inventory is the stock you use to fulfill the orders received through the internet or your online store. With any sales business, it is crucial to have a running total of every item you have in stock, the location of the inventory, how much it costs, and any other related information. In other words, you should be tracking and recording your inventory. Selling online is no different.
With ecommerce inventory, sometimes your products are in a facility owned by your company or with a third-party supplier. If you use a warehouse to store your inventory, then you need to look at warehouse management systems. If you have a growing business and have multiple warehouses, you need a warehouse management system that possibly centralizes your inventory tracking. A superior way to keep track of everything is by using ecommerce inventory management software. The key is to find technology partners that can take you from selling down the block to global expansion.
What Is the Best Ecommerce Inventory Management Software?
As a business owner, you might be asking, “What is the best program to keep track of inventory?” There are multiple options available for tracking and managing ecommerce inventory, so you may want to do a little digging to determine industry trends and which is the best for you. Check out some popular choices below.
Cin7 – This is a popular option because it includes in-house experts and access to videos, tutorials, and guides to help you. It works for companies of various sizes, including startups.
Veeqo – Veeqo is exceptionally user-friendly and is great for companies with multiple locations. This software is also fast and enables you to view information from a variety of sources easily.
Ordoro – This is an incredibly versatile option, especially if you need to access your back office on-the-go. Its software is cloud-based, so you don’t need to download anything, and it is easy to automate or control manually.
How to Cover the Cost of Inventory Management
You have gone through all your ecommerce training, and you have your ecommerce websites. As a small or new business, you recognize the need to implement ecommerce inventory management software and strategies right away. You have every item in stock and a centralized inventory. However, you aren’t sure how to maintain inventory levels and fit it into your budget when your cash flow or sales are fluctuating, especially if you are a newer business. You realize that you can save money if you buy inventory in bulk. It’s not just about optimizing inventory. Managing your cash flow and purchasing power is equally as crucial as your operations management. Fortunately, this is one of the business components that can be covered by a variety of financing options, including online loans, which don’t require you to be in the same city as your lender and may offer lower rates.
A business loan is a traditional style term loan, with a set amount borrowed for a designated purpose and repaid in monthly installments. This type of loan is perfect for projects, renovations, building inventory, or in this case, putting together an inventory management system. You are typically required to have good credit and payment history documentation. You can also use your inventory as an asset or collateral and find a lender that will let you borrow against it.
Business Line of Credit
A line of credit is less like a loan and more like a credit card. Your lender will decide on the maximum amount of money you are allowed to spend, and you will make payments based on the actual amount you spend. For example, you may have a limit of $10,000 and only end up using $6,000. You would begin making payments based on the $6,000 until you have paid the debt in full or used more. Contrarily, if you have a revolving line of credit, you can continue to spend until you reach the total amount, just like you would with a credit card.
Unsecured Business Loans
Unsecured business loans are a good option if you don’t have great credit. These unsecured loans also help companies that are less than three years in business, or they do not have a solid credit history. With this type of loan, you are not required to put up collateral or a personal guarantee, so it doesn’t matter if your business is new or small.
Once you’ve chosen the best ecommerce inventory management software and determined your financial needs, it’s time to talk to a professional. Set up a meeting with a lender that specializes in small business operations and let them know your challenges. Ask questions, be candid about your financial situation, and explore the available options.
At Sunwise Capital, we understand what goes into running a successful small business. We specialize in helping your business find the right lending option so that you can reach your financial goals.
Contact Sunwise Capital today for more information about business loans and lending options, including online loans.