A properly-run eCommerce business has the potential to earn you a lot of money. This is probably the reason why hundreds of entrepreneurs were quick to join the bandwagon when the trend began to surge in 2015.
Running an eCommerce business is never easy though. With so many aspects of the business requiring proper attention, you’re going to need all the help you can get to pull things off.
One such aspect is that of inventory management.
Many would consider inventory management as both a science and an art. After all, the key to a successful inventory management system is to strike the right balance.
On one hand, you need to have the right amount of stock to fulfill your customers’ needs. On the other hand, you also need to make sure not to have too much in excess because this will cost you a ton of money.
The toughest part of meeting this balance is the difficulty in predicting future demand based on past sales. Your business’ sales forecast plays a huge role in getting it right. This is something you should consider because doing your inventory management correctly can help take your business to the next level.
Getting the right amount of stock is just part of the problem, however. Apart from the above, you still need to worry about storing, moving, and delivering inventory. These are not only complex but are also time-consuming and expensive, to say the least.
Properly managing inventory is a complex task.
Given the time it would suck out of each of your days, taking on the task yourself won’t be good for your business.
For one, your time as a business owner is too valuable for you to spend on time-consuming and repetitive tasks. That’s not to say that inventory management isn’t crucial. We’ve already established how integral it is to your business’ success.
As a leader, your time is best spent on higher-value activities. Tasks that allow you to grow your business like crafting new strategies or fostering relationships with other businesses.
When you’re the CEO, you need to do CEO tasks, not operations tasks.
Another reason to outsource is the skill and expertise you’ll acquire. Sure, you know inventory management from top to bottom. You wouldn’t have started an eCommerce business in the first place if you didn’t.
The point is that other people have better skills and experience in inventory management than you. Wouldn’t it be beneficial for the business to have them by your side? Not only will they make the business profitable, but they will also even give it a competitive edge.
While outsourcing can be risky, it does make sense both from a financial and logistical point of view. Why pay someone full salary and benefits when you can get someone to manage your inventory based on hours worked?
Inventory management isn’t just about ensuring that you have enough stock to fulfill your customers’ orders. As a complex process, it requires a lot of planning and organization, which a freelance inventory management expert can do on your behalf.
It’s understandable how assigning tasks to a freelancer can be such a dilemma, especially for a complicated process like inventory management. That being said, below are a couple of activities you can outsource so you can have more time to focus on your more important tasks.
It’s safe to say that for every big endeavor, it’s always the beginning that’s going to be hard. This task depends on whether or not you already have a system in place. If you’re going to let someone manage your inventory, it’s probably better to let them create a system that works for them.
Putting together an inventory management system requires a lot of work. Quite a bit of research is needed to create a process that will ensure that you’ll meet your customers’ needs without running the risk of being overstocked.
To do this, a freelance inventory management expert needs to have a good idea of your customers’ needs and demands. They need to be able to forecast what the customers are likely to buy next week, next month, or next year.
They also need to have a good idea of the proper amount of “safety” inventory to have in stock. This is necessary because forecasts are never 100% accurate.
A good inventory tracking system should also detail the method of inventory to be used. Is FIFO (First-In-First-Out) more applicable for your brand? Will it be more efficient if the business implements a LIFO (Last-In-First-Out) method?
As inventory management experts, these freelancers understand which situations these methods are suitable for. This knowledge comes in handy whether your business is going through an inflationary or deflationary period.
Inventory management requires good analytic skills and attention to detail. Since the task is to keep track of inventory, they’ll need to know how much inventory comes in and goes out daily.
This is extremely important because losing track of the numbers can easily cost you a lot of money. For the system to work, it needs to be done correctly and consistently.
What makes inventory management so challenging is that it needs to consistently strike a balance on the number of items in stock.
You simply can’t afford to have too much or too little because either scenario can lead to catastrophe. While both are equally important, running out of stock can prove to be more damaging because of the possible consequences.
How will you feel if you ordered a pair of headphones only to be told that it’s out of stock? Will you still buy from the same store after such an experience? That’s highly doubtful.
For an online store to become successful, it needs to build strong relationships with its customers. Telling them they can’t have what they ordered for is a sure-fire way of not making that happen.
As mentioned, an inventory management expert needs to be meticulous. Failing to notice that you’re short on stock is simply unacceptable.
Monitoring the number of items remaining in stock is very important. It helps ensure that you have enough on hand to fulfill your customers’ demands.
As important as this step is, another part of inventory management that requires close attention is the number of deliveries and shipments that come in each day.
Why is this important, anyway?
For one, an inventory always needs to be updated. As mentioned earlier, everything needs to be monitored. That is, everything that comes in and everything that goes out.
This is the step that needs to be as accurate as possible because any discrepancy, be it big or small, can lead to losses. As a business owner, you need to be able to track where your money goes. You need to have an idea where every cent goes so you can determine if the business is making money or not.
It’s safe to say that you’ll only be able to answer these questions with proper monitoring and organization. You’ll never be at a loss with a constantly updated inventory.
Even if you’re handing over the reins to other people, it doesn’t necessarily mean that you’ll be completely hands-off.
As the business owner, you need to be on top of things, especially when it comes to anything that involves money. An inventory management expert can keep you up to speed through detailed reports so you’ll remain informed.
This is crucial because you need accurate and timely information to make important business decisions. Through these reports, you’d be able to determine if you need to set up a new backup supplier, change your primary supplier, or maybe stop selling a certain slow-moving product.
These reports will also allow you to identify if your sales forecast is accurate or close enough to the number of stocks you’ve been ordering. The more accurate these reports are, the more profit you’ll earn.
When it comes to running a business, cost-efficiency should always be a priority. It’s always good for a business to find deals on products that are relatively cheap yet above average in quality. Unfortunately, such deals aren’t that easy to find.
Not only is it time-consuming to do the research, but it also requires excellent communication skills. This is where outsourcing comes into play. For freelance inventory management experts, this is not unfamiliar territory.
With experience under their belts, finding the sweetest deals isn’t as difficult as it would be for you. They are also well-versed in communicating with suppliers, particularly those whose warehouses are in other countries.
Let’s be honest. Evaluating suppliers and going back and forth with each of them takes a lot of time. Something you do not have the luxury of.
With an inventory management expert doing it on your behalf, you’ll be able to focus on your more important tasks. It’s always good for the business when the owner can focus on growing it instead of spending time performing these types of tasks.
Deciding to outsource inventory management shouldn’t be difficult, especially if it’s perfectly in line with the business’ needs. The difficult part is finding out where to begin.
We understand how overwhelming it can be, especially if this is your first time outsourcing. Don’t worry because we’ve got you covered.
The following steps should help you kick off your outsourcing venture.
The good news about outsourcing today is that there are plenty of options to choose from. There are literally dozens of freelance marketplaces, each one offering deep talent pools and a variety of skills you can use.
The choice goes down to how involved you want to be in the hiring process. If you don’t have a lot of time, you can go with marketplaces that offer pre-vetted freelancers.
This way, you don’t have to sift through hundreds of resumes and interview dozens of candidates because the marketplace already does all the dirty work for you. All that’s left for you to do is to find the right match.
If you are the more hands-on type, some marketplaces allow you to conduct searches, review resumes and interview each candidate that matches your requirements.
Regardless of your choice, the point is all of these can be done online. You don’t need to personally meet the candidates and speak to them face to face.
Once you have found the right fit, the next step is to formally hire the freelancer. What’s great about these marketplaces is that you can be working with a freelancer within the next 24 to 48 hours after sending your requirements.
But this is not where the buck stops, so to speak. Hiring a freelancer isn’t the end of the line. In fact, the next step is probably the most important one if you want this endeavor to be a success.
Onboarding gives you the opportunity to introduce the freelancer to your business. It allows you to set expectations and let them know what your business is all about and how you run things.
It’s also the best time to provide them access to the tools you use both for communicating and performing tasks.
Though you are delegating inventory management to them, this doesn’t mean that you’ll just leave them on their own. As their leader, you need to still check on them from time to time. You need to manage them properly and guide them so they can deliver what you hired them for.
Inventory management is crucial in helping your business achieve its goals. By outsourcing this task, not only are you freeing yourself up, but you’re also giving your business a better shot at being competitive.
If you’re still on the fence about whether or not to outsource inventory management, just look at the benefits we mentioned. Getting overstocked or short on stock is not going to do your business any good. With an expert in your fold, you can prevent this from happening.
Should you decide to go for it and begin the outsourcing process, all you have to do is review the steps we mentioned. Outsourcing may be a risky move, but it is a risk worth taking given the benefits it has to offer.
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