E-commerce business is fast-growing, and tracking and managing the inventories is quite a challenge. And, it only amplifies with the expansion of the company. Regardless of the size, maintaining inventory is a crucial part of supply chain management, and it must be dealt with.
But how? All the best e-commerce platforms like Amazon, Flipkart, eBay, etc. have large inventories. Well, the value of a company’s stock is usually one of the most substantial assets on the books. To expand their sales funnel and achieve more customer satisfaction, they use inventory management software.
What Is Inventory Management Software?
Inventory management software is a tool that allows you to track goods across your business supply chain. It supports the activities of purchasing products, tracking on-hand inventory availability, and analyzing sales trends.
In short, it optimizes the entire spectrum that spreads over placing the order with your vendor to order delivery to your customer. It maps the complete journey of a product.
So Why Should You Consider Using Inventory Management Software?
A lot has been said about how big ecommerce giants are using inventory management software for their business. But if you are still skeptical about the inventory system, here are a few reasons why you should consider using it.
Achieves Efficiency and Productivity
The most significant advantage of using an inventory management system is that it streamlines and automates the tasks. From keeping track of inventory to shipping orders, and delivering products, it takes care of all.
Besides, these systems help eliminate manual processes so that your employees can focus on more critical tasks of the business. Thus, it results in increased efficiency and productivity.
Maximizes Profit by Enhancing Sales
After the installation of the inventory system, many companies report significant improvement in closing deals. The reason behind this is that accurate inventory prevents you from losing any customers. It ensures that you never run out of stock, and also minimizes human errors while reporting out of stock products. Thus, by increasing your sales productivity, it maximizes your profit.
Increases Customer Satisfaction
One core benefit of using an inventory management system is that it helps keep your customer happy. You can provide personalized service and accurate responses at any moment. You can have access to real-time data at any given time, and it will leave your customers more satisfied than ever. They are able to track the current status of their shipped products and some systems also let you notify your customer if the product is back in store.
The inventory management system acts as a central database where all the information related to your stock is kept. That means you can easily manage all your orders from one place and direct products to the right customers. In addition, with a proper warehouse tool in place, you can track the availability of all your products and services accurately. And thus, inform your customers on the status of their order promptly.
Integration With Back-Office System
Quality inventory management seamlessly integrates with back-office applications, like billing software and ERP systems, which process stock related data. Purchasing an open-source system will allow custom connections to all service providers. And, it usually comes with the best technical support.
Eight Important Features of Inventory Management System
If you are planning to automate and streamline your business with an inventory management system, ensure that the tool has the following features:
i. Inventory Tracking
The main focal point of an inventory system is to track your inventory level. It should be able to maintain a record of all the orders you are receiving, filling orders, and when you need to refill your stock.
Many inventory tools can help you track your stock. Choose the one that fulfills your needs, not every system has the same capabilities. One of the most popular and desired features is barcode scanning.
Barcode scanning allows the exchange of electronic data. The data contained in the barcode is tied to something, such as a lot number or a purchase order. Once scanned, the system displays the data to learn more about the product and take action.
Some of the other tracking tools are RFID Tags, lot or batch control, serialization, and more.
ii. Integration and User-Friendly Interface
It’s quite not possible to get all the key functionalities of your project from one single source. Ideally, any inventory system should be able to tightly remain in sync with other systems or applications to automatically share information. That way, you don’t have to waste time synchronizing data.
For instance, using billing software solutions, your inventory system should be automatically able to update your order records and generate an invoice on the same. Or, whether the system seamlessly integrates with a document management system to store all your data in one place.
Besides, the system should have a user-friendly interface so that users can easily access it. Of course, what user-friendly means to some people might not be the same for you. But then again, the system should have an in-detailed training tutorial on how to use the program. It will ensure that any new employee who joins the team can quickly learn it.
Whether you have just started out or already a well-established organization, business keeps expanding. That being said, the system should have the capability to scale as the business grows. It should be able to handle a larger capacity of data and upgrades. Switching systems every time your company expands is not only feasible but costly too. Besides, it will interrupt the current workflow and cause a lot of problems.
That’s why it’s wise to invest in a system that is flexible and scalable. It will definitely pay off in the long run.
iv. Reporting and Analysis
For any software, reporting is an important feature. Reporting helps you check the efficiency of your workflow. It should be able to generate reports in real-time and also be customizable as per your needs. Some standard reports include sales and purchase reports, order history, and invoicing. There are many other types of reports, and you should know what your company wants.
Furthermore, the system should be able to tell you more than how much stock is left of each product. It should be able to analyze the data and predict the future trend. For instance, it can create a report on which products are more profitable and thus, help discover sales trends. These insights into your data analysis will help you make a smart business decision.
v. Automatic Replenishment of Stock
Do you want to wait until your stock is entirely over and miss out on a sale? Inventory management should have the ability to automatically create a purchase order as soon as it falls below a certain amount.
When your stock reaches that minimum level, it will generate orders with the correct quantities. Once the order is created, you will need to approve it, and the products will be shipped. This is a must-have feature if you want to make sure that you don’t run out of stock ever. In fact, the system also takes care that your inventory is not overstocked and saves you from the unnecessary capital block.
vi. Product Categorization
Many ecommerce stores deal in more than one type of product. An effective inventory management should be able to track inventory for many products at the same time. It should offer tools that can easily migrate products between different groups and channels, and make them easily searchable by name, date, type, popularity, price, brand, and many other filters.
Additionally, this feature ensures that the classification includes stock levels, product history, and expiry dates. It helps you forecast demand and create accurate orders from your suppliers.
vii. On-Premise Versus Cloud-Based System
When selecting a new inventory management system, one of the most critical factors to consider is whether you choose to deploy it on-premise or in the cloud.
While on-premise is installed locally - on your own computers and servers, cloud-based software is hosted on the vendor’s servers. It can be accessed through a web browser using any device. In fact, some vendors also offer “hybrid” deployments, in which cloud software is hosted on an organization’s private servers.
Both have their own set of pros and cons, however, cloud-based service is becoming more popular. Given the fact that Software as a Service (SaaS) subscription has made inventory management systems more affordable than on-premise implementations. The cloud service cost is based on the number of users and data storage usage. Besides, implementation takes a shorter time frame as compared to on-premise.
However, the key question is which one is right for your organization?
viii. Reliable Customer Service
Customer service is one of the most important features that we often tend to ignore. It is essential to choose only reliable systems where your data is secured, and all the calculations are accurate. And most importantly, always test customer service in advance. You never know the troubles or issues you might experience in the future with the system. That’s why make sure that you have an excellent support team in place to take care of it. After this article make sure to check our other articles, we have one about the best facebook marketing courses.
Final Thoughts: Find the Right Inventory Management Software
If you are looking to purchase an inventory system, evaluate your needs first, and weigh it against all the alternatives. Choose the one that perfectly fits into your requirements, and see your e-commerce platform grow.
Himanshu Singh is a marketing specialist at SoftwareSuggest, He is well versed in software platforms like eCommerce platforms, document management, invoicing software. He is also interested in domains like Machine Learning and Semiconductors. In his spare time he enjoys Guitar, Badminton, and Photography.