An important topic for cross-border e-commerce firms is inventory management and strategic processes. This is an activity that includes on-time supply and storage of products in online store established for cross-border e-commerce with affordable costs. Within this framework, the priority in inventory management in cross-border e-commerce is to have sufficient inventory to meet the possible demands. Additionally, the main point is to manage the entire process from inventory supply to inventory storage with the lowest cost. In this article, we have talked about inventory management in cross-border e-commerce!
What Is Inventory?
Inventory is the most important asset for a brand or firm that markets a product. The products in the inventory can be converted into cash as long as these products are sold. An unsuccessful inventory management can cause serious damage to the firm. Therefore, it is important to work on inventory processes and apply a correct strategy. In addition to supply the goods, storage, tracking and insurance are processes that require certain investment. Therefore, a bad management model might lead to dangerous financial problems. The most ideal model for inventory management is a smart management that prevents excessive inventory or shortage. Each firm in cross-border e-commerce must have correct amount of inventory at the right time in cross-border e-commerce.
Inventory Management Process
In inventory management process, new products are ordered as long as the products are sold. Seasonal products must be sold. For example, during New Year or other holidays, products for these periods must be in the inventory. When these periods end, these products are destocked with strategies like discounts or campaigns. A successful inventory process prevents storing less or more products than needed. At the same time, such process ensures extra inventory for order delays or demands more than expected. Because insufficiency inventory will delay customer orders. This might lead to risky consequences such as customer dissatisfaction and decreased sales.
Things to Consider in Inventory Management in Cross-Border E-Commerce
With the advancements in technology and widespread use of the internet, sales channels and business forms also changed. Therefore, different risk and precaution items emerged in inventory management. Brands must be careful about good inventory management to avoid any decrease in sales.
The things to consider in inventory management in cross-border e-commerce are as follows:
- If the online stores have multiple platforms, different customers must be managed in coordinated manner.
- It is extremely important to inform customers at most in 24 hours in online sales.
- Firms that sell on multiple online channels must be more strategic in inventory management.
- Products must be categories in sales-oriented way.
- Products that always must be in the inventory and other products must be separated.
- Software and integrations that provide real-time inventory information should be used.
In addition to all these, customers in the target market must be known well in inventory management. Customer purchasing behaviours and trends must be followed. Thus, seasonal or instant inventory and product updates are possible. Possible crises can be turned into opportunities.
Benefits of Successful Inventory Management in Cross-Border E-Commerce
You need to have products in your inventory to be successful and reach good sales numbers in e-commerce. The same is valid for cross-border e-commerce. Customer access to the products they want to buy at any time means profitable sales over the short- and long-term. Keeping the inventory product amount under control is the most important thing in the inventory management process.
It is important to use software that warns when the inventory as at critical level, constantly follows sales on multiple cross-border e-commerce websites and removes out-of-stock products from online stores. In addition to the healthy inventory management provided by such software both prestige, success and customer satisfaction can be achieved. Therefore, inventory software plays an important role in inventory management.
It is important for those who want to be in cross-border e-commerce and firms who want to sell on multiple online platforms to use inventory software. When you correctly manage your inventory, you can increase your sales, increase customer satisfaction, gain prestige among consumers and gain competitive advantage.
Must-Have Properties of Inventory Software
Inventory software can meet most of the things needed in inventory management processes. Thus, the system will warn when a new product is needed and correct amount of products can be ordered at the right time. Working with these systems can minimize the inventory cost, possible losses and risks.
In general, inventory software should have the following properties:
- Your inventory and sales should be synchronized in real-time.
- Out-of-stock products should be instantly removed from sales.
- All data should be viewed on a single screen and the most up-to-date data should be provided.
- For inventory with multiple warehouse, all warehouses must be integrated and all data must be collected on a single screen.
Storing and Inventory Control
When you are in cross-border e-commerce, product acceptance and control, systematic placement and collecting based on orders, barcoding and packing are the part of storing process. Even the smallest mistake in storing or inventory check might lead to incomplete, delayed or damaged product delivery to the customer. Therefore, this process must have a sustainable system. At this point, working with correct business partners and a well-planned system at the beginning is crucial. Otherwise, delivery time will start to be longer, damaged or incomplete delivery will cause customer dissatisfaction and your sales will start to decrease.
You can use different warehouse methods in cross-border e-commerce. First method is using your own warehouse. The most important benefit of this method is flexibility. Additionally, you can benefit from having the control mechanism in your firm, cost advantage over time and staff skills. What is more, you can offer faster delivery to your customers and gain significant advantage over your competitors. Of course, you need to consider warehouse investment and operational costs in this method.
Sales Without Inventory: Dropshipping
Another method is dropshipping which is supplying the products externally and operating without inventory. There are many e-commerce websites adopting this method. At this point, two separate methods can be followed in demand and supply process. Products can be purchased from suppliers when there is order to supplier can directly deliver these products. But in this case, longer and uncontrolled delivery time might lead to incorrect or incomplete product delivery.
Another method for storage is managing warehouse processes with logistic firms and delivering the products to end-customers. In this system, product acceptance and quality control are undertaken by the logistics firm. Working with a logistics firm will have big advantages for the seller in cross-border e-commerce. This will decrease warehouse costs and enabled more controlled and more problem-free process management. There are many factors to be considered and applied if you are starting cross-border e-commerce activity in an unknown market.
Inventory management and storage are among the most important steps in this process. Therefore, you can easily be successful in a new market with a successful inventory management and correct strategy, increase your sales in stable manner and gain significant profits. Organizing an incomplete inventory management in a new cross-border e-commerce market will lead to challenges as well as higher costs and losses. Therefore, you need to be careful about necessary investments in inventory management before your operations.