As the holidays approach, every retailer hopes that customers rush to their online store, resulting in skyrocketing orders. This happy scenario could have a sour ending if sellers run out of inventory and face a “stockout.” Customers get grumpy and their reviews reflect it; giving your company a black eye that doesn’t heal easily. Amazon interprets your “currently out of stock” status as a sign that you’re an unreliable seller and your sales rankings suffer. In the meantime, your well-stocked competitor benefits from your miscalculations.
Most e-sellers have run out of inventory at one time or another; it’s almost impossible not to. However, there are a number of things you can do to minimize your risk of a stockout.
- Track sales trends. Pay attention to selling rates. If you’re selling four products per day, do the math to figure out how much of that product that you’ll need over the next few months. If those few months include the big winter holiday shopping days, double your sales predictions. When you crunch your numbers accurately (and often), you can do a better job of predicting future sales volume.
- Include a “cushion.” Whether you are stocking items yourself or sending them to Fulfillment by Amazon, order 20 percent more than you estimate that you will need. There are some drawbacks to having the merchandise sitting there longer than you want. There’s always a chance that it won’t sell but those risks are usually eclipsed by the ramifications of a stockout.
- Delegate. There’s no shame in not having time to manage your inventory as well as you’d like. Many busy entrepreneurs have this problem. If you can’t track your inventory effectively, make sure that you delegate the responsibility to someone who can.
- Automate the process.There are some outstanding software programs to help you monitor inventory per SKU, setup minimum inventory levels, generate automatic purchase orders, track peak buying seasons (and adjust orders accordingly), and allocate inventory to your most profitable channels. Let the software do the heavy lifting and save you time.
- Attend Amazon sellers events These internet retailer trade shows can connect you with gurus in the online selling business. You’ll get tips and tricks for streamlining your inventory management process so that you don’t run out of merchandise.
With the winter holidays fast approaching, stay on top of your game so that the rush of shoppers doesn’t leave you stocked out.