Managing inventory is a pivotal part of peak season for every ecommerce store, regardless of size or industry. You want to make sure you have the right stock levels to satisfy demand. Underestimate inventory needs and buyers can have a negative experience with your brand because of backorders or stockouts, or you could just flat out lose business. Overestimate the inventory needs of your ecommerce store and you could be stuck paying for too much shelf space you don’t need, which cuts into profit margins.
So how do ecommerce stores satisfy inventory needs wisely while moving adeptly against any adversity peak season may hurtle like a snowball in the woods? The key is to be aware of inventory challenges out the gate, and have knowledge on how to overcome them should they occur. Lucky for you, in this blog we’re going to cover both!
Challenge #1: With So Many SKUs, It’s Difficult to Predict How Much You Need Now and When it’s the Right Time to Reorder
Solution #1: Utilize the Best 3PL Software to Analyze Data in Advance and Access Real-Time Reporting Tools to Anticipate Resupply
Accurately forecasting your inventory needs for peak season is a daunting task. Spikes in buyer behavior around this time of year are always present, and yet can be unpredictable all the same. In order to avoid order fulfillment woes, we recommend sharpening your demand forecasting game, and that is accomplished by leveraging data from previous peak season, and even previous sales in general, to gauge the stock you’ll need to keep buyers satisfied.
That may seem easier said than done, but when you have the power of advanced order fulfillment software, it’s as easy to do as it is to say. ShipMonk’s first-of-its-kind 3PL software offers ecommerce stores a simple, straight forward, one-stop-shop method to manage all aspects of the order fulfillment process. A big part of that is inventory management.
Data is to peak season as wrapping paper is to a Christmas elf—necessary if you want things done right. ShipMonk’s order fulfillment platform provides a clear picture of your inventory levels at all points in time so you can have as granular a view as you like of past sale/peak season inventory and a realistic view of your stock levels at all times once a new peak season arrives.
That means, in terms of past learnings, you can run dependable reports on all aspects of previous performances (successes and shortcomings) so you’re better equipped to make decisions about advanced ordering and replenishment this peak season. And in terms of taking action as we move into the present peak season, you can critically examine the rate of incoming orders, keep an eye on replenishment status, and track real-time inventory updates across your operation. What more could an ecommerce store wish for this holiday season to totally nail it through Q4?
Challenge #2: Orders Require Too Much Time to Pick, Pack, & Ship
Solution #2: Utilize Optimally Organized Fulfillment Center Space
Ecommerce stores that are successful during peak season have inventory management down analytically and physically. To minimize the amount of time it takes to pick, pack, and ship your ecommerce orders, your inventory needs to be optimally slotted in a state-of-the-art fulfillment center.
“Optimal slotting” means having your inventory organized in such a way that when orders come in, your fulfillment centers are able to get goods out the door in the simplest, most direct way possible. What goes into that? To start with, you need fulfillment centers like ShipMonk’s that are built on organized and efficient slotting methodology. We strategically place your inventory in prime locations that decrease the time it takes to locate specific products and get them through the fulfillment funnel.
Part of that involves utilizing our advanced 3PL order fulfillment software to understand your order flow. Based on what products sell, and at what rate, we’ll organize your ecommerce store goods to meet those needs. We can even recommend new slotting strategies based on inventory fluctuations and sales trends as peak season progresses.
Another aspect of optimally organized fulfillment center space is on-the-ground technology paired strategically with expert 3PL staff. ShipMonk is experienced in putting human hands at the right places throughout the order fulfillment journey to maximize customization, care, and accuracy. Meanwhile, moving around those 3PL experts is fulfillment center technology like Cubiscan® Dimensioning Systems, Automated Slotting Technology, Tote De-Stackers, Pick-to-Light Systems, High-Speed Sortation Robots, Automated Mobile Robots. This technology seamlessly fits into and enhances the order fulfillment flow when a fulfillment center is laid out to the best of its ability.
Challenge #3: Orders Take Longer to Deliver Because of Distance and Overtaxed Fulfillment Center Staff
Solution #3: Split Inventory Across Fulfillment Center Facilities
In order to stay competitive, ecommerce stores in all markets actively seek ways to reduce the time it takes to pick, pack, and ship orders to customers. For this reason, leveraging fulfillment services from a 3PL with a wide array of locations is one of the best things an ecommerce store can do to prep for an optimal peak season, and full year.
ShipMonk, for example, operates omnichannel fulfillment services from 12 first-party locations across the globe. Our ecommerce store clients typically use a combination of locations in this extended network because handling all of your fulfillment from a single location not only overwhelms a warehouse during peak season, it inconveniences the customer because orders take longer to arrive. Why? They have farther distances to travel if that single fulfillment center is responsible for shipping to a larger geographical area.
So . . . if you want to be in the best place to thrive through peak season, don’t put yourself at a disadvantage from the start in terms of letting customers down, compressing profit margins to pay for greater shipping distances, and stressing out the staff of one lone fulfillment center that’s trying to get everything done.
Splitting inventory figuratively and literally lightens everyone’s loads by spreading out the work and minimizing the distances packages need to cross to be delivered. Shipmonk, for example, will use our network of facilities and the extended reach of our major shipping carrier partners to get your orders across shipping zones quickly and affordably so every order’s last-mile shipping is significantly reduced, which leads to happier customers and margins.
Challenge #4: Limited Storage Space is Messing with Your Profits
Solution #4: Harness “Just-in-Time” Inventory Management
Space in any warehouse or fulfillment center is expensive. Add those costs to your high-stakes margins during peak season and the folks in your finance department will be sweating bullets like snowmen in July. So, rather than stress your expenses by expanding your inventory storage space during peak season past what you normally need, ecommerce stores may want to leverage their existing fulfillment center space by employing “just-in-time” inventory management.
Just-in-time inventory management is an inventory strategy that involves importing your ecommerce store merchandise to your fulfillment centers(s) as needed, which minimizes some of the limitations of storage capacity. It also means that if an order from your ecommerce store is canceled, or certain SKUs don’t meet the expected demand you have for peak season sales, those goods won’t sit around your fulfillment center(s) taking up valuable, costly space.
Just know that while just-in-time inventory management can help your order fulfillment process gain efficiency, this inventory management strategy opens you up to some risk if (for some reason) your day-to-day order fulfillment operation runs off track. Luckily, “running off track” is not something ecommerce stores who partner with ShipMonk have to worry about in terms of our 3PL’s part in the order fulfillment cycle. We have the organization, technology, software, and trained team to keep things running smoothly.
This means the only variable factors that may inhibit a perfect just-in-time inventory management strategy include: the accuracy of your demand forecasting, suppliers/manufacturers falling behind, and unexpected shipping delays during peak season.
Though, in truth, ShipMonk has you covered in that last circumstance as well thanks to our ecommerce store shipping safety net known as our Virtual Carrier Network. This adaptable, flexible cross between rate shopping and transportation management keeps you from being handcuffed to any one shipping carrier or route, so even if there are shipping delays, our 3PL will always find the best and fastest ways to get your goods to customers.
Challenge #5: The High Stakes of the Holidays Means Increased Errors When Orders Ship, Which Leads to Higher Returns and Lower Customer Satisfaction
Solution #5: Communicate Clearly with Your Fulfillment Center Staff to Minimize Inventory-Related Errors During the Order Fulfillment Process
Getting peak season shoppers to click “buy” is only half the battle. The other is the order fulfillment process. A lot can go wrong during that journey for every ordered good, especially when customization is involved. After all, plenty of ecommerce stores have special packaging, inserts, dunnage, etc. that need to be utilized.
To keep errors low, if not nonexistent, you’ll want to ensure you’ve clearly communicated special needs to your 3PL provider and the fulfillment center(s) where your inventory is kept. Our experts are here to deliver on your expectations, so just make sure you’ve clearly communicated what those are and are maximizing your inventory management capabilities through our fully-integrated software. The more you use the advanced features, integrations, and status updating tools available there, the better your ecommerce store’s order fulfillment will be at every fulfillment center.
On your side, be sure to keep your ecommerce store up to date. That entails setting honest expectations about shipping timeframes and reflecting inventory shortages on your website by noting if some goods are available for preorder, backordered, or out of stock. The accuracy of those three components can counter the potential for a lot of customer friction. You’ll have access to those numbers with inventory management software that provides real-time updates for every SKU every minute of every day!
All in all, there are a lot of ecommerce stores out there that buyers can take their business to. If you want to keep them happy, and thereby keep their business and your profits up, then it’s pivotal that inventory errors are minimal. Especially during peak season. And, just in case some complications seep through the cracks, you’ll want package protection, a post-purchase suite for easy claims management/resolution, and a full range of delivery status notification options.
Your Quintessential Q4 Partner
Inventory management is the crucial crux of an ecommerce store’s peak season success. If you don’t have that in order it’d be like Santa taking off without a flight plan. The aforementioned five challenges are the most common adversaries every ecommerce store must contend with every time the holidays roll around, and we hope the solutions we’ve offered can help set up your ecommerce store for maximum margins.
If you’d like to employ any of these order fulfillment and inventory management solutions to your brand with the help of experts, contact us before it’s too late. Our 3PL team is the quintessential Q4 partner for ecommerce stores on the rise this peak season, and every peak season.