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Inventory Management is the most physical task for a retailer and e-commerce industrial company, and because of that is at the same time one of the most important management areas and one of the most overlooked ones.

Lots of retailers still make their inventory management manually, which leads to chaotic organization, shipping and accounting. We take a look at the more common mistakes that companies and warehouses make, and give you the definite inventory management problems and solutions list to handling inventory in the best possible way.

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1. Overselling

The worst nightmare for any e-commerce company comes true when there’s no enough stock in the warehouse to comply with the number of online orders. This is a more common inventory control issue than you think, and it specially occurs during critical shopping periods like Black Friday or Christmas.

In order to avoid overselling products, an industrial company should determine their minimum stock threshold or par levels, which are the minimum amount of products that must be always in store. It’s a good idea to mark the minimum and the maximum amount of stock for each product, because too little could causa overselling and losing sales, but too much could be cost inefficient if that stock isn’t sold. Also, these marks aren’t fixed and they can change over time, according to seasons and trends.

These numbers aren’t easy to calculate when there are a lot of products, channels and launching dates, so in order to manage the costs and benefits of the company, an inventory management system or software can help forecast the stock needed for each product, which ones are best and worst sellers, and how much is being sold in each channel.

2. Slow and inefficient warehouse management

First of all, the space. Lots of warehouses are organized inefficiently, which leads to slow pickings, misplaced items or shipping the wrong product.

The warehouse space must be used accordingly to the company’s sales. Don’t use a random storage system, but a calculated disposition of products inside the warehouse and on each shelf. The most sold items should be nearer your shipping deck, to achieve faster pickings, and each product must have an accurate label with basic information like reference number or SKU, price and other specifications.

A Product Information Management system helps organizing all the products with error-free, updated in real time and synchronized data in the warehouse and any other online catalog or channel. 

Another common inventory control issue arises when it comes to update inventory information between different warehouses, if a company manages several ones in one country or even in different countries. A PIM software also solves this inventory control issue, as it can send the same information to every warehouse.

Other common mistakes that happens when a company doesn’t have an organized inventory  management are inaccurate receipts and purchase orders, and returned items that aren’t updated to the database, so stock levels aren’t real.

But the best inventory management solution isn’t paying for the fanciest inventory management software, but also hiring specialized training for the implementation process and having some expert in the team to get the most of the tool. Remember that the best systems offer you a personal training adapted to your pace and needs, like our PIM system — you can check it out here.


 Read more: What is a PIM?


3. Spoilage

That’s even worse than a misplaced item, because a spoiled product is a lost investment. It could happen to companies that sell products with an expiration date, like food, beverages, medical supplies or cosmetics.

To avoid spoilage in your warehouse always apply the rule of First-In First-Out (FIFO) — the stock that first gets in is also the first to get out. That way you aren’t selling always your newest stock and older items keep rotating.

Keeping this information clear can be tricky, so get some software that helps managing real-time data to know the stock lifecycle. Also, do a regular checking routine, because a lot of companies only make a yearly check and they find many bad surprises. You don’t need to check everything at a time, but smaller batches that you can inspect daily, especially stocks with expiration dates, to be sure that your online information and labeled storage items are on track.

4. An abundance of old stocks

Old stocks aren’t spoiled or ruined items, but products that can get out of fashion or season, and the less popular and slow-selling items. It could also happen to products that are not adapted to new regulations anymore, like toys or baby’s accessories. They are usually called ‘dead stock’, because many companies don’t know how to get rid of them and they’re just taking up valuable space.

Like a comedy movie, you can hide those dead items in the closet for later, or try to place them at some party, hoping that someone doesn’t notice they are out of date and could find them somehow attractive. This means that the slowest selling items can be listed in marketplaces where you can find demographic niches, or suggesting those products in related searches or a as complementary products to the best seller ones.


 Read more: All you need to control your stock management


5. Lack of internal communication

The majority of inventory management problems happens because of a lack of communication between employees and departments inside the company. A good communication system is essential to guarantee accurate information in the product lifecycle. 

A strong inventory management software also includes workflow features to manage your teams, update data across different places and give roles and managing or editing permissions to each member of the company. Create your own network where you can easily solve inventory management problems and solutions.

6. Disconnected online and offline channels 

If your inventory isn’t in order, no sales channel will have accurate stock information. And it’s very important to offer consistent information across all channels to ensure a strong brad image and improve the customer’s trust.

An inventory management system sends and receives sales and stock data in real time, so each of your online (website, app, marketplaces…) and offline (POS or brick-and-mortar stores) channels know how much they can sell and how much is being sold every day.

7. Inaccurate customer service

The most common queries that a retailer customer service hear everyday: when will it be available again? Where can I find it near my area? Could it be delivered to my address in the same day?

All these questions have one thing in common: they need stock information to give an accurate answer. And customer satisfaction depends on them. A company’s customer service must have access to real time information about stocks and availability, to inform clients about when and where can they expect the products. An inventory management system shows when an item will be restocked and what store has a product that is sold out in other one.


 Read more: Your definite list of inventory best practices 


Now you know that the best way to avoid inventory control issues is taking notice of these inventory management problems and solutions and apply them from now on, with the best software tools that saves any e-commerce company time, costs and many headaches.


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