Without an orderly distribution of the merchandise that enters an eCommerce store’s inventory, the business can hardly be efficient in the sales processes. An efficient warehouse management generates great benefits and can ensure the longevity of the operations. Jose Duarte, an entrepreneur and eCommerce specialist from Costa Rica, explains how to implement inventory control in an eCommerce business to increase revenue and decrease costs.

Some of the benefits to efficient warehouse management for an eCommerce store include fast response in delivery and availability to the customer, improvement of the revenue stream, as you can count on better merchandise turnover, knowing which products should be removed in the online store and better planning that reduces personnel and freight costs. Implementing procedures that will offer these improvements doesn’t have to be difficult.

The first tip is to always maintain updated inventory information. Explains Duarte, “You have to update the product catalog daily or weekly and verify that in the online store the items that appear are available in the warehouse. There are online stores that leave the product in view of the users who enter the web and, when the user decides to buy, it is no longer in stock. This causes unnecessary inconvenience to customers that does not suit the brand.”

Products need to be classified into specific categories. After having refined the information of the products you have in your warehouse, the next step will be to organize each of them into families depending on demand. High turnover products are those who have a constant sale during all the months of the year, and must always be on the list of orders with suppliers. Temporary products don’t have a constant sale, but they do in specific seasons. Purchases from suppliers depend on demand, usually every two to three months. Lastly, products with low demand are those that are ordered from the supplier only when the customer orders them. It is not recommended to keep these products without rotation in the inventory because they do not know how long they will be sold.

Identify order and purchase times to maintain greater efficiency. “It is very important to measure the time it takes the supplier to deliver your order,” adds Duarte. “This way, you will be prepared when a specific product is being finished and you will know when you can offer it to the customer.” To measure delivery times, just check your supplier’s delivery history. In addition, you must take the packing, label or assembly time that this product can carry before delivering to the end customer.

On the other hand, purchase times must also be identified. To measure them, you will only need to see the sales history and verify the frequency of sales, so the purchase quantity is determined. With this in mind, you’ll have an effective inventory rotation.

Place a maximum and minimum of products in your inventory. In this step, it is necessary to calculate the number of products that are required within 60 days or more; the time is set by you. Therefore, you have to calculate the maximum and minimum quantity that your warehouse can allow to store the product in the established time, in order to comply with an assortment prepared for demand and not run the risk of shortages.

Always monitor inventory in real-time. The main objective of a constant monitoring of inventory, is to plan an efficient purchase order that saves freight costs. That is, when you have to buy a product that reaches its minimum amount of availability, you also have to know which are the other products that are reaching this limit to make a comprehensive and not individual order that leads to higher costs.