Today’s shop-at-home world creates risks, opportunities, and challenges in inventory management for small businesses. For many small businesses, it can seem like a daunting task to set up an eCommerce store.
Most business owners have (valid) questions like:
- How do you get started in eCommerce?
- Which eCommerce platforms are the best?
- What if I want to sell on multiple channels? How can I sync them all?
- How do I manage my inventory across several different physical locations?
- What’s the best way to store, categorize, and label products for easy processing and shipping?
And these are just for getting started. When you take these together, it may feel like it’ll take you another lifetime before you’re ready to launch or grow your eCommerce business.
It’s not as simple as throwing a few items online on your website, Amazon, or Shopify. 73% of shoppers say they use multiple platforms when they shop – even for a single item. Even as a small business, you’ve got to be a multichannel seller.
However, with the right tools, it doesn’t have to be difficult. If you are a small business, getting online is much easier than you think. In this post, we’ll unpack:
- Why it’s so imperative for businesses to pivot to an online eCommerce model
- Step-by-step instructions for getting your business online quickly
- Best practices for sustaining and scaling your eCommerce business online
Why small businesses need to get online — and quickly
As people spend more time at home and become even more comfortable shopping online, small businesses need to adapt to online selling as a core function of their retail operations. Failing to do so will cost you sales and puts your business at risk.
Consider this common occurrence:
Someone comes to visit your store. While they are looking at a product, they whip out their phone and do price comparison shopping. It happens so often now there’s even a name for it: showrooming.
A Harris poll revealed that 46% of consumers admit to showrooming in-store. Many purchase items online even though the product they want is sitting on the shelf right in front of them. It can work the other way, too.
Reverse showrooming is when people shop for products online, but then visit stores to buy. That sounds great, but only if you have your merchandise online.
If you aren’t offering your inventory online, they won’t visit your store or even be aware you have the products they want. It’s not just the tech-savvy folks doing this. Nearly 70% of consumers say they research online before shopping.
If you’re not selling online now or struggling to manage your online inventory, you need a better solution — one that won’t take years to implement.
Untapped Opportunity in the eCommerce Space
U.S. consumers spent more than $601 billion with online merchants last year. That number represents 16% of the total retail sales in 2019 and the growth isn’t stopping either. eCommerce rose 14.9% compared to 2018. That’s a lot of revenue businesses are missing if they aren’t actively selling online.
Online selling opens new markets as small businesses can sell far beyond their geographic borders. Worldwide, eCommerce sales amounted to $3.5 trillion last year. That number is expected to double by 2022.
Plus, online, your storefront is open 24/7/365.
So we’ve seen the need and seen the opportunity. What are the specific ways inventory management software helps small businesses get online faster?
Let’s get into it.
Solutions for Small Business in eCommerce
Central to every small business is inventory. Managing your in-stock items, what’s on order, and forecasting pending business is crucial to your brick-and-mortar success. It may be easier to do in-store but imagine what happens when that inventory is spread out across multiple eCommerce sites.
To grow a successful eCommerce business, a small business must first get a handle on its inventory and supply chain. The first step is inventory management for small businesses that can integrate with your current supply chain and system of software solutions.
6 Ways Inventory Management Software Helps You Get Online Faster
Central to every small business is inventory. Managing your in-stock items, what’s on order, and forecasting pending business is crucial to your brick-and-mortar (and online) success.
It may be easier to do in-store, but imagine what happens when that inventory is spread out across multiple eCommerce sites.
1. Inventory Management Software Automatically Manages Your Inventory and Supply Chain in the Cloud
To grow a successful eCommerce business, a small business must first get a handle on its inventory and supply chain.
If you’re still running your business using a spreadsheet to track inventory, it’s going to be difficult to scale and manage multiple sales channels.
Manual entry is time-consuming and prone to errors. One error on a spreadsheet can be duplicated over time and result in huge discrepancies. This results in unexpected out-of-stock or overstock situations – both cause problems.
The most essential first step in getting online quickly is to take all physical or local inventory records and input them into your inventory management software.
The reasons it’s so important to have them “in the cloud” and not simply stored locally on one machine (such as in an Excel spreadsheet) are many:
- You can access your supply chain data (including lead times and shipping updates) as well as inventory from anywhere on any device
- Barcode scanners or scanning-enabled devices can transmit and receive real-time data
- All your software solutions can integrate seamlessly into one “single source of truth” (more on that soon)
2. Inventory Management Software Integrates With All eCommerce Software Solutions
Alright, we’re moving right along. Once you’ve got your inventory and supply chain data in the cloud, you’re halfway there.
Now, it’s time to take all your storefronts (physical or digital) and integrate them together.
One thing that slows small businesses down a lot when transitioning to an online strategy is figuring out how to make all their software solutions “talk” to each other.
How can you get your Amazon sales to reflect your total inventory cost against your eBay sales while simultaneously integrating with your shipping platform and accounting software?
Doing this manually would take forever. Inventory management software can help you manage this quickly and efficiently.
SkuVault, for example, integrates with nearly every major eCommerce solution. In fact, you may already be using a few to run your business.
Whether you need to build an online site, integrate your Point of Sale (POS), or connect to shipping software, SkuVault has you covered. Here are just some of the eCommerce solutions we can integrate with:
- Big Commerce
- Channel Advisor
- Channel Sale
- Geek Seller
- Seller Active
- Solid Commerce
Point of Sale Systems
SkuVault also integrates with:
- Accounting software like QuickBooks
- CRM, such as SalesForce or Oracle
- Dropshipping, such as Duoplane, LogicBroker, and SparkShipping
- ERP, such as Oracle NetSuite, Microsoft Dynamics
Here is a comprehensive list of integrations that work with SkuVault. If you don’t see what you’re looking for, plug into our API or contact support to see if we can build an integration to the solution you need.
How much time would it free up for you to be able to manage your entire eCommerce technology stack from one IMS?
With SkuVault, the Quantity Sync feature will make sure store listings and online listings are synced for accuracy. It also includes a buffer feature to limit quantities across channels to avoid overselling.
Here’s something you won’t get from other inventory management systems: you can actually call us at no additional cost. We can help get you online selling faster as we walk you through the implementation process. We’ll even come to your physical location and help you set up SkuVault to start selling online faster.
3. Inventory Management Software Offers Real-time Inventory Tracking
Excel is a staple in businesses across all sectors. It has several automation features that make it well-suited for a bevy of complex tasks. But quite simply, it cannot sustain the dynamic complexity of a busy warehouse.
The state of your inventory is constantly in flux. You have inventory that’s ingested via a delivery or purchase order. You also have inventory that’s been accounted for through an online order, yet not picked. You have picked inventory that’s yet to be processed, and processed inventory yet to be shipped.
On top of that, you have in-transit inventory and inventory returns. All of these states must dynamically be accounted for in real-time.
I don’t know any eCommerce manager that wants to dedicate a full-time employee to that job. On the flipside, I don’t know anyone who wants to sit in front of and manage an Excel spreadsheet all day.
This is one of the most critical functions of a good inventory management platform. Using a simple barcode scanner and some standardized barcodes, warehouse managers can sleep easy knowing that the heavy lifting of inventory tracking is completely automated.
As inventory is scanned throughout various points in its lifecycle, managers can check their IMS at any point and see the status of their product.
This functionality alone will save dozens of hours over just a few months and is alone worth the price of an IMS.
4. Inventory Management Software Tightly Integrates With the Most Profitable Marketplaces
Amazon controls more than a third of all eCommerce sales in the U.S., accounting for more than $221 billion in sales in 2019 and a 25.% increase from 2018.
SkuVault is fully compatible with Amazon’s marketplace and inventory systems. Also, the SkuVault Amazon FBA feature tracks quantities in the FBA (Fulfillment by Amazon) queue. This keeps your inventory counts, including individual SKUs, accurate at all times.
You can also create an FBA shipment with the click of a button. Using an open API with Amazon’s Seller Central, SkuVault returns customer data automatically.
By reducing errors and delivering the right products by promised delivery dates, you can quickly manage your Seller Performance Ratings.
Managing your FBA inventory, preventing mis-picks, and shipping the wrong goods will help maintain high seller ratings (the lifeblood of successful Amazon sellers).
This saves you tons of time when selling on Amazon and helps you avoid the tedium of monitoring and managing these metrics.
5. Inventory Management Software Streamlines Your Supply Chain
When it comes to inventory management in small businesses, you can significantly improve your margins by leveraging your supply chain.
Not only can you sync inventory across multiple sales marketplaces and platforms, but you can also track multiple suppliers. This makes it easier to track costs and pull vendor contact information directly into purchase orders.
When merchandise is received, you can scan items or enter information manually to match items to POs.
As your online business grows, streamlined ordering and digital pick lists, including wave picking or lot picking, can dramatically speed up the fulfillment process.
6. Inventory Management Software Helps You Manage Multiple Storage Locations
If you have more than one retail location or warehouse, you can manage your inventory across all your locations from one interface. No matter where your inventory is, you will know. When it’s time to ship or move merchandise from one location to another, your team will know where to find items.
This also applies if you’re utilizing a 3PL provider who’s storing your inventory in multiple locations across the country.
More Benefits of Using Inventory Management Software in Your Small Business
If you’re still running your business using a spreadsheet to track inventory, it’s going to be difficult to scale and manage multiple sales channels. Manual entry is time-consuming and prone to errors. One error on a spreadsheet can be duplicated over time and result in huge discrepancies. This results in unexpected out-of-stock or overstock situations – both cause problems.
Total Inventory Automation
An IMS like SkuVault automates many of the necessary tasks involved with inventory management. What exactly does this mean, and how does it save you time?
Once inventory information is entered into your system once, the information will always be accurate as long as your staff uses the system as their central hub. You get detailed reporting, which helps with better purchasing and forecasting.
Automated triggers can be set to tell you when it’s time to re-order based on preset minimum inventory levels. This helps avoid disappointing customers when they are ready to buy, and you don’t have the stock on hand to fulfill their order. It can also help avoid inventory pileups and tying up cash in stock that isn’t moving.
If a human were to manually manage some of the tasks we describe in this post (and elsewhere throughout our blog), it would cost your organization at least one full-time employee’s salary.
Small business owners wear a lot of hats. More than anyone, they acutely understand how powerful automation can be in cutting costs and saving time.
IMS platforms like SkuVault automate the redundant, yet necessary tasks of keeping a warehouse running. Things such as:
- Reordering stock when supplies are low
- Getting at-a-glance reports of each sales channel (Amazon, eCommerce site, Etsy, etc.)
- Tracking inventory at every stage in its lifecycle (more on that below)
- Generating pick lists and batching orders in a wave picking or batch picking system
An IMS will also help you catch errors before they happen.
One of the costliest errors businesses make is in order fulfillment. If a business accidentally ships out the wrong items, it frustrates customers and can cost you business.
At the same time, you’ll have problems maintaining the inventory you need and have to touch things several times as you deal with returns.
SkuVault’s Inventory Management Software has built-in Quality Control features that check orders before shipping against the original purchase orders. If you are about to ship something that’s incorrect, the QC function will catch it and flag it for you before the wrong item ships.
More Efficient Order Processing
The pick, pack, and ship process can be time-consuming. It can also be a logistics nightmare without Inventory management software.
An IMS will streamline your fulfillment process whether you are using in-house fulfillment, FBA, or juggling multiple warehouses or physical locations. This helps you get orders out the door more quickly.
For example, SkuVault can generate intelligent picklists and “pick routes” that mitigate any sort of physical backtracking as your warehouse staff picks products.
These can be printed, but digital pick lists (accessible from any synced mobile, tablet, or desktop device) will reflect any changes or updates between your brick-and-mortar location(s) and online listings.
You can also connect your preferred shipping solution to your IMS for complete visibility on order tracking.
Online sellers have a notoriously high return rate. Depending on your products and industry, returns can run more than three times the rate of brick-and-mortar stores.
While physical stores see average return rates of 8.8%, 30% of products that are ordered online are returned. This causes another level of concern when it comes to managing inventory.
With an inventory management system for small business, this can mess up your inventory counts quickly. An IMS can help you quickly scan returning merchandise and keep your inventory counts accurate.
One of the biggest time-savers is implementing a barcode scanning system that syncs with your IMS. For more information on the power of the humble barcode, check out our post on the topic here.
Lower Costs and Higher Cashflow
As an eCommerce business owner, you’re constantly looking for ways to trim your operating and maintenance expenses and increase your operational cash flow.
In the finance world, this number is called your free cash flow. Free cash flow is the pure profit your business has to invest in growth opportunities and scale without taking on debt.
So how does an IMS help you beef up your cash flow statement?
1. Warehouse downsizing
In addition to automation, IMS platforms can help you downsize your physical warehouse. Think about it: when you store excess stock on “gut feelings” that you’ll need it, you overstock. That’s just human nature.
How much physical space could you save if you had data-driven reports on inventory demand? How would that affect your purchasing strategy?
2. Less capital tied in up inventory
That dovetails into another practical way IMS platforms help small businesses cut costs — less capital tied up in stored inventory.
Experienced eCommerce sellers know the delicate tightrope walk of having enough inventory on hand vs. not tying up too much capital in stored inventory.
Overstocking can potentially lead to dead stock, which is money down the drain. Yet, at the same time, there’s no greater gut punch than when a customer tries to order and can’t due to a stock-out.
Thanks to demand forecasting (the next benefit on the list), you can be confident that how much inventory you store isn’t too much or too little. It’s based on historical, reliable data — not feelings.
3. Smarter demand forecasting
Small businesses usually begin their operations with a few essential products and a manageable, yet steady customer drip.
As the business grows, so does the number of SKUs and (hopefully) the number of orders. Supplier logistics get more complex, and estimating how much of a SKU you need to satisfy orders gets more challenging.
As you expand, you need historical data to help you understand which products move in which seasons. In fact, for even greater warehouse efficiency, we recommend structuring your physical warehouse layout based on seasonal trends.
But this is only possible if you have access to that data — data only an IMS can provide.
Platforms like SkuVault will aggregate all of your historical data and provide easy-to-read reports on estimated demand. You can drill down into particular marketplaces and product categories, so figuring out how much stock you need to avoid stock-outs isn’t based on gut feelings but factual data.
Accurate Product Stocking
One of the secrets to avoiding poor customer experiences and earning repeat business is to prevent stock-outs.
Stock-outs are when a customer orders a product that appears to be in stock, yet isn’t. Therefore, the picker can’t fulfill the order. It’s bad for everyone.
This seems simple, right? In practice, it’s quite complicated, especially when multiple SKUs and complicated supply chains are involved.
Couple this with seasonal demand trends and unforeseen economic disruptions (such as COVID-19), and it’s no longer a “back of the napkin” task.
Par levels (also known as reorder points) are thresholds in your inventory that act as a signal to reorder more product. They’re designed to help warehouse managers walk the aforementioned tightrope of having stock on hand without tying up too much capital.
Most par level calculations also have a built-in “safety stock” level as an extra guard rail to prevent stock-outs.
For more information on how to calculate par levels for your inventory, check out our comprehensive post on it here.
To make things simple, these are numbers you’d historically need to calculate, tweak, and monitor manually.
With an IMS like SkuVault, you’re not left worrying about stock levels. Simply input your reorder points for each SKU, and the platform will automatically remind you when it’s time to order more product.
More automation, fewer costs, and less capital tied up in inventory mean more free cash flow to invest in business growth.
In the not-too-distant past, small businesses knew what was selling because they’d see empty space on their shelves. When supplies in the back started to dwindle, they would re-order.
After years of using pen and paper, spreadsheets then became the norm. Needless to say, any process that depends upon human data entry will introduce a lot of errors.
Though the technology has evolved, getting online quickly and managing multiple storefronts hasn’t gotten any less complex. That’s why you need accurate inventory management and reporting to help make better decisions.
SkuVault’s reporting and analytics can help you make better use of your collected data. On-demand reports can be customized and exported, making it easy to create and share operational insights.
One critical feature of SkuVault is the Replenishment Report. This allows you to generate a detailed report of inventory levels.
It uses three different report types (reorder, replenish, and assembly) and allows for a deep dive into sales forecasting, reorder points, and minimum/maximum order quantities.
The best part is that it brings all these things together whether you are selling online or offline. Your sales history is funneled into a single report.
Better data leads to better purchase decisions and yields a stronger ROI.
The Fastest Way to Start Selling Online
Inventory management software may seem like a luxury reserved for big corporations, but that couldn’t be further from the truth. Using a robust inventory management system for small business can get you online faster than just about any other tool. And with a robust inventory management strategy, you’re practically guaranteed a positive ROI.
An IMS like SkuVault can manage your inventory across every sales channel, improve your efficiency, reduce errors, and improve customer experience.
Everything runs more smoothly and, most importantly, works together seamlessly. This gets you out of the weeds and affords you time for high-level thinking and vision-casting. After all, you’ve got a business to run.
Contact the experts at SkuVault and let us show you how fast we can get your small business up and running online