3 Ways to Gauge the Effectiveness of Your Online Inventory Software
Good inventory management is the basis of a successful ecommerce store. And, by extension, the right online inventory software can provide important metrics to help you with decisions such as scaling your business and identifying areas for improvement.
Track sales and stock counts in real time
At its core, proper tracking is knowing WHAT is moving and at what pace. Moreover, it can tell you if you have way too much or way too little inventory, as well as how to avoid painstaking inventory recounts.
Another key point is that the right online inventory software will identify trends you can capitalize on through sales and promotions.
Off the cuff, do you know your best and worst sellers?
Understand your inventory turnover rates
You can ascertain your inventory’s performance by looking at its turnover rates. In fact, your online inventory software should tell you the number of times that inventory is sold and replaced over a certain time period. In most cases, this is a year.
A higher turnover rate indicates brisk sales. On the other hand, a low turnover could mean a couple of different things: For one, you might be over ordering stock. And, for another, and underscoring the first, you may need a new business strategy.
Assess the health of your overall business
It’s wise for any business owner to regularly calculate their return on investment. That way, they can determine if there are enough profits to reinvest into the business to boost future growth.
But, for ecommerce retailers, there are added inventory costs to consider. These include not only the cost of purchasing the inventory itself, but also any associated costs. For example, storage fees, insurance, software, and risk factors like obsolescence.
Inventory issues can cause wasted time, overspending, and inefficiencies. And this is why, in the long run, your online inventory software can indeed become a very valuable tool in helping your business stay successful.
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