Inventory Management: Low-Cost Techniques to Ensure Your Products are Alway In-Stock
You can’t sell what you don’t have! Ensuring stock levels are kept at optimal levels requires a fair bit of a work, yes, but it’s the kind of work where you’ll see some impressive returns. Towards the beginning of Q4 2014, and during the lead up to Christmas I embarked on a campaign to get stock levels to above 80%. By this I mean having 80% of the products available through the website, in stock and ready to ship. At the moment I’m only about half way there but already I can see a drastic improvement in revenue and # of orders placed as a result, and Q1 2015 is shaping up to be just about the best in the company’s history. Below I’m going to share with you my low cost techniques that I’m using in my business and that you can implement too.
Inventory Management Software that won’t cost the earth
There’s a lot of choice out there when it comes to WMS (Warehouse Management Systems) and Inventory Management software. Further below are the SaaS apps I researched extensively before deciding on the low cost technique I’ll outline here. All of them have their strengths and you might find some of them useful, but looking at my business’s needs it didn’t warrant the extra cost each month, despite their powerful features. Previously I used Brightpearl which is what’s called an ERP (Enterprise Resource Planning) solution, that’s fancy talk for Business Management Software. However it got pricey, and more importantly cumbersome for my needs. I needed something low-cost, high-impact with the ability to “talk” to the storefront’s database and backend functions through and API. Which they were able to offer, but at a great custom development expense. Enter Google Sheets and Zapier. Two low (to no) cost solutions that offer simple yet powerful functionality for most of your inventory management needs.
Google Sheets | As part of the Google Drive family, Google Sheets is a powerful web based spreadsheet editor, and because it’s Google a) it’s free and b) just about every other app or SaaS on the planet integrates with it via their API. Here’s how I use it.
Below you’ll see a couple of screenshots from inside my Google Sheets which lists inventory that has recently gone out of stock and that needs to be re-ordered (RO Imports, and RO Local). The columns needed are date o/stock, product code, product name, supplier, quantity and notes. To automate the process of getting the out of stock products onto this sheet, you’ll use Zapier but also need to find out how your shopping cart software deals with notifying you about low or out of stock products. If it’s an email alert, like in Mantality’s case, you can use the email parser that comes with Zapier to strip out all the product data and present it neatly in Google Sheets – see Zapier screenshots further below.
Once a week, like clockwork *, I’ll view this list and create purchase orders based on the out of stock products (from the last 7 days) to send to suppliers. For imported products these are added to the RO Imports sheet, and when there’s a good number of products for a particular supplier (which you find by filtering the supplier column to just that supplier) I’ll copy those rows and send via email or as a separate sheet to the supplier. You then copy this to the Suppliers Orders sheet and when it arrives you can remove it from there or add to an archive sheet if you ever need to refer back to it. It’s a good idea to record the goods value in both purchase currency and local currency to keep abreast of currency fluctuations, and allows you to see what you paid on previous orders. Inevitably there will be instances where suppliers won’t have stock or there’s a product that has been discontinued etc. Add these to the Needs Attention sheet or Ordered/Pending sheet (depending on which is needed) to keep a record of these products, and what’s going to happen with them down the line. It’s always good to get an ETA or some feedback from suppliers for o/stock products so you know what needs to be done with the product. If the product has been discontinued or EOL, you’ll need to decide whether to replace it with something similar or create a whole new product page on your storefront. Here’s an article where I give advice on what to do with deleted and discontinued products.
* Consistency is key here to ensure good stock levels. Set aside an hour or two every week to focus on your inventory – after all it is the lifeblood of your online business. This also serves to give you a holistic picture of your inventory sales to ensure you’re always making educated decisions when it comes to inventory purchases.
In the screengrab further above (at the bottom of the image) you’ll see a “Needs attention” sheet. Above is a close up screengrab of this sheet. This is essentially all inventory that’ll have some sort of issue that needs to be corrected. Whether that be finding a new supplier or a follow up that’s needed. This sheet is there for any issues that crop up with products and inventory. What’s also incredibly handy and powerful about using Google sheets is that you can create comments for cells. This allows you to have an entire log of what’s going on with a particular product and shows comments from yourself or other uses who you share these sheets with – think of it as a light and powerful SRM (Supplier Relationship Management) solution.
Zapier | Another tool you’re going to find indispensable is Zapier. This is an ingenious web based app that integrates with a multitude of existing web services as is constantly adding new ones. It’s powerful in that when something happens in one place, Zapier then does something somewhere else. For example, one of the things I’ve setup Zapier to do is create a new facebook and twitter post everytime a new product is published to the website. It does this via the store’s RSS feed. Originally I had it set to publish all new products but now I’ve filtered it so that only products with the (invisible to the user) HTML comment of “<!– feature –>” found in the short description, will then be published to our social media channels. One of it’s other important uses – and this pays for the service tenfold – is that it’s setup to capture the email address and names (along with other variables) of all new registrations and orders from the Mantality storefront; and then pushes these to our email marketing app. This means there’s 100s of new emails automatically synced every week and ready to receive our next emailer. I’ll discuss this more in a future email marketing article.
So essentially that’s how I use 2 web services, that are able to exchange data between one another, to ensure stock is kept at optimal levels. The best part about this is that it costs next to nothing to have these two services running in tandem. So where I might be losing out on powerful, granular reporting that some of the big guys below offer, I gain on simplicity and just about zero cost. It needs a bit more in the way of man hours, but this is not lost time because once you have everything automated, there’s loads of value in knowing exactly what’s selling and keeping your finger on the pulse in terms of your inventory.
Inventory Management Apps
Below are a few Inventory Management Apps that I researched before deciding on the low-cost, high impact solution above. Have a look through them, you might just find one of use.,
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