However, with better inventory management, overselling can be greatly minimized even though it usually occurs as a result of both unforeseen and predictable seasonal demand spikes. Therefore, to mitigate the risk of stockouts, it is advisable for e-commerce retailers to prioritize inventory management best practices. Such practices include but not limited to the following:
Always Conduct Frequent Cycle Counts
Even if you already have a reliable warehouse management system in place, there’s the need to regularly conduct cycle counts. The reason is because damaged or misplaced items can occur at any time. If they occur, they can cause a mismatch of physical inventory with recorded levels. So, if you conduct regular cycle counts, particularly in different warehouse areas, it helps retailers to know what they have on hand and where they have it. They can then investigate discrepancies to keep stock levels accurate.
Continuously Monitor your Inventory.
This is inevitable. Constant inventory monitoring helps catch potential stockouts before they become an issue. If you have real-time inventory tracking system in place, it is possible for e-commerce retailers to react quickly to low stock levels. This helps them to easily spot recurring patterns they can take proactive steps to prevent.
Carefully Establish Reorder Points
In e-commerce inventory management, reorder points act as a signal to restock before inventory runs out. They help to create a buffer between inventory and the amount of stock sent to channels. With this in place, you can easily calculate the rate at which items are sold. Armed with this vital info, retailers can order in advance to ensure stock arrives before current inventory is completely exhausted.
Adopt an Effective Inventory Management System (IMS)
This is hugely imperative for e-commerce retailers who want to manage their stock effectively and efficiently. Technically, an advanced IMS is the best line of defense to prevent overselling or stockout. E-commerce retailers who update their inventory in real time can unify their sales data in a single system. This helps them to track stock levels across all channels, marketplaces, and shopping carts. This is why huge e-commerce business retailers like Walmart and eBay have systems in place to make sure consumers always see accurate inventory availability when shopping on their platforms.
Deploy Robust Forecasting Tools.
In e-commerce retailing, competition is real and fierce. Smart forecasting can help retailers with a bit of edge in the business. But to do so effectively, you need accurate and reliable data. This is because a data-driven approach to demand forecasting is really critical for eliminating stockouts. With sophisticated forecasting tools now available to retailers, they can easily forecast how much stock to order based on a variety of factors such as current aggregate inventory, product velocity, purchase order ETA, and historical sales data.
Last Line
Besides the huge competition, e-commerce retailers really worry about brand reputation, customer retention and lost revenue which overselling or stockout can affect. So, preventing overselling at all costs is really crucial for the survival and growth of e-commerce business. This is more so when they market through multiple sales channels. What to do? If retailers manage to implement best practices around inventory management and real-time stock visibility, they can stay agile, protect margins, and enhance customer experience. This they can do even if they occasionally face supply chain disruptions and unexpected demand spikes that are inevitable in the business.
