"I just wanted to start an e-commerce business, and now my family has disowned me."
You’ve launched your e-commerce business, and are feeling pretty good about yourself... as you should! Your website is flashier than a disco ball, products are flying off the virtual shelves, and your customer base is growing faster than the weeds in your now horribly neglected garden. But wait, it’s time we talk about the big fat elephant in the warehouse: inventory management. Here are five common mistakes that new (see: noob) e-commerce businesses often make and get publicly shamed for. Avoid these, and you’ll avoid being paraded around naked by the insane denizens of ‘the marketplace’ as they dispense ‘e-commerce mob justice’.
Or something like that. You get the idea.
- Overstocking Your Inventory
Ah, the sweet scent of success —or is that the DISGUSTING, sour smell of unsold inventory? (Or is it just me again? *sniff* Whew, nope). More is not always merrier, especially when it comes to stock. Ordering too much can lead to storage nightmares and increased holding costs. Plus, if your products have a shelf life, you’re playing Russian roulette with expiration dates… and you know what they say about Russian roulette; the only real winners are the Russians… and the roulettes. When ordering new inventory, start with conservative estimates for your stock, and get just enough until you learn more about what kind of sales to expect.
If you've been stocking up on 'Russian Roulettes' it's because you know this game is going to be the next fidget spinner craze.
- Neglecting Inventory Tracking
Some people believe in the magic of the universe. You? You believe in the magic of friendship (in the e-commerce world, it’s polite to refer to ‘properly tracking inventory’ as ‘friendship’, for some reason). Without friendship, you’ll be blissfully unaware of what products are actually available or running low, leading to stockouts or surplus. Use inventory management software to keep tabs on your stock levels, sales, and reorders. A good inventory management software is like having a good friend always by your side.
"I really cherish our ‘properly tracking inventory’. It means the world to me."
- Poor Forecasting
Remember that time you thought you could predict the weather yourself, and ended up soaked in the middle of a typhoon, standing there in nothing but your underwear while a cheap Chinese dousing rod disintegrated your hands? No, that’s never happened to you? *cough* Yeah, well, sales forecasting can be just as unforgiving. Relying on your gut feeling might seem cool until you’re drowning in unsold inventory or scrambling to restock hot items. Use historical data and market trends to predict demand accurately. You can usually find this information online if you spend about 15 minutes looking. It’s not quite sorcery, but it’s definitely better than 'staring into the eye of a typhoon and wondering why you didn't just use a weather app', if you know what I'm saying.
Life has a tendency to constantly give us lemons. How about you go ahead and forecast that. Life is lemons.
- Ignoring Seasonal Trends
You’ve probably noticed that around Christmas time, a lot of Christmas themed stuff suddenly appears in stores. You might be surprised to learn that it's not just a huge coincidence that somehow happens to occur every single year! Retail stores make use of seasonal trends, and you can too! Plan your inventory around peak seasons and holidays. If you're selling physical goods, expect more sales around the holidays. If you're selling food like snacks, expect a dip around summertime. It's like preparing for a zombie apocalypse—having the right gear at the right time can make it easier for you to survive.
"Maybe if I can convince Santa to give out tropical bikinis this year, I'll finally get rid of this stock..."
- Lack of Backup Suppliers
Putting all your eggs in one supplier’s basket is risky business (and Hulk don't. like. risky. business!). What if your supplier suddenly can't... supply? What if there's a change in management and now the supplier is consistently sending your products late? What if bees were capable of understanding human language but were only able to scream in response? Always have a backup plan; that means backup suppliers to keep things running smoothly, in case the worst happens. And the worst always happens.
Personally, I like to vet each of my backup suppliers' backup suppliers by backing up their supplies, just to test the system. But that's just me I guess..
Don't Be a Noob
Avoiding these noob mistakes is a great way to make sure your e-commerce store grows fast and doesn't run into much trouble. And maybe you'll even prevent that that public humiliation we talked about at the beginning of this blog post. By being smart about your inventory management, you're doing yourself a favor; keeping your customers happy, your business running smoothly, and your reputation intact.
Mix-Mix Mail
At Mix-Mix Mail, we know that dealing with inventory management while trying to grow your e-commerce store is like trying to learn how to juggle knives while actually juggling knives.
That’s why our fulfillment services are designed to help e-commerce businesses streamline their operations without needing a PhD in logistics (that's a real thing by the way. If you meet anyone with this PhD, make sure you call them "Doctor", even if they insist you don't). We have warehouses in Tokyo and Los Angeles, and our basic fulfillment service already include inventory management. Check out the rest of our site to find out more!