Managing Inventory

Customers expect that when they place an order, it will arrive within the promised time frame. Getting it there earlier than expected will even make the customer happier, thus providing a greater buying experience. Providing a great shopping experience will not only earn you a loyal customer, but that customer will recommend your online store to her friends and family. Keeping inventory in stock and keeping an eye on low inventory levels will eliminate delays in shipping and reduce returns from customers who received a particular product too late.

Keeping an accurate and up-to-date inventory list will help you keep your business running smoothly. It will also help you view which items are selling well and which items may need additional exposure or a reduction in pricing.

Your inventory management procedure will depend on the number of products you offer, the size of your company, and the volume of products you are selling.

Here's a list of things to consider when planning your inventory management procedures.

• Identification: How will you identify each product? Will it be by name, SKU number, bar code, price, or your own unique code?

• Documentation: Make sure the procedures are well documented. This will ensure that new employees will have a reference and repeat the same procedures. Include procedures such as shipping, product holds, handling returns, and documenting orders.

• Training: If you have more than one person helping you, make sure that person is properly trained using the documented procedures.

• Accountability: If you have employees, make sure they are accountable for their mistakes. If they do make mistakes, make sure they are quickly rectified, or have another training session with that employee.

• Tracking: Will you be able to track which item was shipped to which customer? Having a good documentation and tracking system will give you control of your inventory.

• Re-evaluate: Take a look at your procedures periodically. Make sure your process is still effective, and determine whether any improvements can be made. Ask your assistants or employees if they have any recommendations or changes on how the process can be streamlined or improved.

• Monitor: Monitor the process to ensure all the steps are followed. Any missteps can cause the whole process to fail, thus making the tracking of inventory impossible.

Tip:

If you rely on a third party to supply your product line, make sure you have a backup supplier just in case your original supplier cannot come through. Never rely on what are called "sole sources" for your business. Not being able to meet the demands of your customers can mean the end of your business. Remember those newsgroups we spoke about in Chapter 11, "Basic MarketingPromoting Your Yahoo! Store for Free." Bad reviews can be detrimental to your reputation.

If you rely on a third party to stock and ship your products, make sure they have enough inventory. Constantly monitor their current inventory levels and make sure they contact you when the inventory researches a certain threshold level. Also, if you are using the Inventory Manager, make sure the data is updated.

Restocking Inventory

As mentioned in Chapter 10, "Setting Up Your Yahoo! Store Order Settings," Merchant Solutions has a built-in Inventory Management System that will allow you to set alerts when a particular item in inventory reaches a certain threshold you set. This will allow you adequate time to restock your inventory.

Caution:

Unless you're making your own products or are selling downloadable goods, make sure you know how much inventory your suppliers have and how long it will take for you to restock your inventory. Although you order your products in advance, it doesn't mean you will receive them on time.

Take a look at your product purchase volumes and rates so you can have a better idea of how much more inventory you need to purchase. Not having enough stock will require you to frequently reorder inventory. Having too much stock will require more capital, and it may stay on the shelves longer than expected and take up valuable space.