Many people have big ideas when it comes to starting e-commerce businesses. But when it comes to actually putting the operational side of the story into action, they quickly run into trouble. One of the major sticking points is down to inventory.

Inventory management is one of the most important things to work out when you are starting an e-commerce business and trying to establish yourself. The principles of managing your products are fairly simple. If you don’t have the products, you won’t make sales and will lose customers. But if you have too much on your shelves, it’s a worrying sign that could cost you a lot of money in the long term.

With this in mind, here are some simple inventory management tips for anyone starting or struggling with their e-commerce business. Read on to find out more.


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Get to grips with turnaround

First of all, you must establish a system that makes you aware of how long it will take you to fill an empty shelf. If a customer places an order and has to wait for you to get the product in, it’s not going to look good – it’s a negative experience. A little math is involved, of course, and you will need to establish turnaround times for every single product. It’s called your ‘lead time’ and it is a critical part of running a good online store.

Storage and arrangement

Be prepared to have plenty of inventory on your hands as soon as your business starts taking off. One month you may get away with storing your products in a spare room, but it might not be long until you need to move your store into a garage – and then perhaps some kind of small warehouse. You might need a pallet rack or two, or other types of shelving, depending on your products. But you also need to get into the habit of running a First In, Last Out – or FIFO – system. This will ensure you eliminate your oldest stock first, and reduces your chances of ending up with dead stock.

Keep on top of returns

Returns can start stacking up quickly when your business begins to grow. And it’s critical that you are dealing with returns to suppliers – and returns from customers – in the correct way. It will help you keep your stock levels accurate, and prevent issues from arising with customer service.

Establish great relationships

A lot of new e-commerce business owners put all their focus into establishing positive relationships with their customers – and rightly so. However, by making an effort to do the same with your suppliers, you will benefit. There may be times when you need a favor, or a particular product on the shelves a little quicker than normal. Without a positive, healthy relationship, you simply won’t get that advantage.

OK, so there you have it – a few simple ideas on how to ensure your inventory is managed properly. With a little forward planning, there is no reason why you can’t handle speedy growth, while still protecting your bottom line. Good luck!