Finding the ideal inventory management software for your online retail business is no small endeavor. With the multitude of options available, it is easy to get lost and confused about which one works best for you.
In this blog, we attempt to provide you with a set of guidelines that will help you make a well-informed and insight-backed decision. Don’t worry, we’ll cover all the major features and factors you need to consider when you look for inventory management software.
Features to look for in your inventory management software
Tracking your inventory in real-time
Your inventory is pretty dynamic. Items in stock are moved around pretty fast and regularly This is why you need a solution that tracks your inventory in real-time, and offers you details regarding which products are already booked, which ones are inbound, which products are returned in the original condition, and which ones are lying on a shelf at any one of your store outlets. That way, you can divert available stocks to match and meet customer orders fairly easily.
Live and summarized stock value
The stock quantity isn’t the only metric you need to measure. Your finance team is more concerned about how much your stock is worth so that they can accurately assess how well your business is doing in terms of balancing revenue and expenses.
So it isn’t enough that your solution tracks all your products in real-time. It should also be able to provide real-time summaries of the overall stock value by location, right down to the specifics. This is vital information, especially if you handle more than just the online retail side of things.
Stock alerts and auto-generated purchase orders
Multiple stock channels open up multiple avenues of opportunity. However, it is easy to lose sight of when your stock is running low if you’re selling on more than one online platform. You might realize that you don’t have enough stock to meet those Instagram sales, at which point you might also run late on delivery.
To save you the hassle of manual ordering, look for an inventory management solution that offers automated ordering features. Ideally, it should regulate and keep track of when your stock levels are below a certain set threshold, after which it automatically issues an order to your supplier. The order quantity and bill details can be based on historical data and tweaked manually, according to your needs. Generating a quick purchase order saves you time in actively checking which stock levels are falling.
Re-ordering based on insights
Manual copy-pasting consumes hours of your valuable time. The ideal inventory management solution can help you shorten this process, automatically feeding all your data updates into your database in real time, and offering you a bird’s eye view of your inventory. This will also help you make better purchasing decisions, based on which items you need in bulk, and which ones you can do without, as well as which items are better removed from your catalog.
Auto-filling purchase details is an excellent inventory management software feature that helps you save hours in re-ordering. It would allow you instant access to supplier info, previous transaction history, and more.
SKUs shouldn’t be restricted at all
Online retail is fast-growing, not just in terms of sales, but also in the sheer number of items you can add. Any inventory software that has an upper limit on the type and quantity of products it allows you to add is a huge red flag.
In general, limits on any transaction are not a good sign, especially in inventory management, where spontaneous changes are bound to happen. You don’t want your SKUs (stock-keeping units) to be restricted just because of mediocre software. It is especially helpful when your software allows you to download monthly reports of sales, stock data, and other inventory
Inventory reporting should be seamless
Data extraction should be the smoothest and least time-consuming operation you do. Auto-generated reports, both in figures as well as converted into visuals are always welcome when you’re handling large-scale inventory. It may not seem that big of a deal when you’re operating in a small location, but once you level up sales, the challenges become more evident.
Component-wise tracking for electronics
Even in retail, sellers might have to order separate product parts and components which are later assembled into a product line. Some inventory management software allows you to take note of the BOM (Bill of Materials) and do a quick update on them as well.
Batch tracking for food items
Perishable goods demand a batch tracking feature that allows you to detect and monitor when the product is about to expire. This way, you can plan your sales drive to collect unsold items and restart your supply afresh. For retailers selling food items such as eggs, bakery goods, and other perishables, the feature is certainly a must-have.
Track every individual model and item
Generating and tracking serial numbers are crucial when you deal in electronic products. You won’t be solely tracking the product, but also the spare components that can replace existing ones when it gets overused or if it is defective.
The make, build, and model of each product might require a certain matching component. Keeping track of where you’ve located each component saves you time in searching for the right tool every time you get a faulty item that’s to be serviced. Advanced inventory management software comes with similar advanced features that are ideal for electronic retailers.
Mobile functionalities: always a plus
This becomes vital when you have to coordinate your staff to pick, pack, and dispatch inventory items on the go. Manual management takes a great deal of time and effort. It is way more convenient if your warehouse team can simply access tasks on their smartphone, log in, scan, and update their status without having to constantly check with the admin. Most inventory management systems these days come with a mobile support feature built-in.
The future is multi-channel
Amazon, Shopify, and other eCommerce platforms are often sales channels that you do not want to miss out on. Make sure that your inventory solution is primed to integrate and coordinate in sync with these portals as well. It is essential to get all your sales channels’ data uploaded in real-time to your central inventory database.
Advanced security measure: stay a step ahead
Encryption standards have to be super-advanced when you’re selling online. The last thing you want is for fraudsters to intercept your transactions or delivery information. If you’re resorting to a third-party vendor software for inventory, make sure you thoroughly validate that their security measures are up-to-date.
Third-party integration should be frictionless
Compatibility is the real hang-up when it comes to inventory management. Having to manually transfer details is almost not worth the cost of investing in separate software.
The whole point of buying or subscribing to a vendor inventory solution is to make things easier, more cost-effective, and less time-consuming. If you cannot integrate your existing apps and software with the vendor’s software, it would be best to look elsewhere.
An open API inventory solution is better suited for ERP and accounting software. It integrates better and helps you process more data without resorting to other third-party applications.
You’d be using both these tools heavily and exchanging data between them pretty frequently, which is why this is important.
Centralize your database
As we mentioned before, once you spread your stock out over multiple locations, it becomes harder to track each item down to the specifics. This is where a lot of inventory can either go missing or even be pilfered by staff. Furthermore, inconsistencies such as delivering customers the product from a further off warehouse when there’s one close by need to also be avoided.
Even the most basic inventory management solutions offer centralized storage tracking. You can create a hierarchy of warehouses, and sub-locations such as aisles and shelves so that every product is accounted for, wherever it is located. This is a huge benefit that can hardly be underestimated. It saves you a great deal of money in the short term as well as in the long run.
Eliminate manual operations and paperwork
Paperwork is the real burden that ends up costing you a lot of time. In today’s modernized, fast-paced world, it doesn’t make sense to have your staff running around with clipboards unless there’s an emergency. You should be able to automate your stock-taking and tracking through digital means, such as barcode scanning.
Just a quick scan should be enough to update all the stock details in your database. Trust us, this is a huge time saver, and every high-end business uses automation to speed up its inventory. Keeping up with your competition demands that you use automation-savvy equipment.
Sales reports are always promising every time any company implements an inventory solution. The reason is pretty self-evident. With fewer human errors and even lesser misplaced stock, your operations run smoothly. This inevitably translates into better sales and better-utilized staff.
Delivery performance made excellently
On-time delivery is achievable when you use inventory software. Most of the mistakes and slip-ups in meeting your customer’s delivery expectations occur because of a lack of proper tracking systems in place.
A good inventory solution helps you plan your shipment, to meet those deadlines within time. Further, you can also involve your customers in the process, providing them valuable updates on where their order has reached.
Perfect your re-order levels, frequency, and quantity
We’ve mentioned this before, but just to be clear, inventory management is a delicate balance between overstocking and understocking. To be more accurate, businesses tend to lose more in wasted stocks and unnecessary maintenance costs than they do in losing customers due to a shortage.
A lot of this comes down to knowing your ideal order frequency and ensuring it matches the average demand for your product. It is difficult to measure this on a large scale without some form of software in place that collects all the data for you, while also offering all the info you need in a visual format.
Spare yourself needless storage
Having an inventory management solution should help you spot when your sales are dropping or experiencing a spike. Alerting you to this also helps you decide when it’s better to cut down on storage to save up on maintenance costs.
Demand forecasting keeps your business competent
This is one of the most crucial features that any decent inventory solution should provide. It should help you forecast demand and plan your order rates and stock levels well ahead. This can only be made possible when you have enough historical data of past sales as well as a good analysis function built into your inventory solution. Ideally, it should evaluate the data and come up with a reasonable forecast for your reordering frequency. This should also be in line with your constraints.
Sort your products flawlessly
The key feature you need to look for in any inventory solution is searchability. It shouldn’t be difficult for you to look up your products and arrange them by name, value, quantity, supplier, demand, or any other filter.
Categorizing your product based on criteria will help you identify which ones are successful and which ones are falling short in demand.
Barcode scanning is all the rage. The feature is highly desirable, especially because of the convenience it offers to online retailers. Not only does it help you keep track of your stock data in a matter of minutes. It also gives you a level of control and insight into your inventory that is simply missing when you do it manually.
Regularly updated product information
Regular updates are vital when you’re dealing with a great deal of inventory. It is easy to overlook certain stock details when you resort to manual stock-taking.
A decent inventory solution keeps you alerted and up-to-date on all your warehouse data, from the available, dispatched, and booked, all the way to the expected.
Scalable equals successful
Online sellers starting small should look into inventory solutions that aren’t just matched to their current needs, but also future ambitions.
Ideally, decent software should be scalable enough that you don’t have to switch solutions every five months as your company grows, just to accommodate all the excess data. The more your sales grow, the faster you need to process all that data in time.
Keep your customers updated (and happy)
Don’t forget that the result of selecting a good inventory management solution is keeping your customers happy. Sure, the solution doesn’t have to fulfill the functions of a CRM. But there are features included that are overall with customer support.
Most of your customers would be eager to get updates on their product delivery. Offering them accurate tracking information on time from the get-go to delivery is an ideal way to stand out. Your brand gets associated with a respectable level of transparency.
Your customers will be delighted to get regular updates on the status of their orders, right from the start. We often find that many customers get deterred by brands who don’t inform them about the product being out of stock except when it is already too late.
So far, we’ve covered some of the most basic features that any worthwhile inventory solution should have. There are several ERP and business software that offer plenty more functionalities but at a greater cost.
If you’re an online seller somewhere between the startup and mid-range phase, the features we’ve mentioned in this blog are absolute essentials. As for all the add-ons, you can figure out whether you need high-end software based on your growth rate and investment threshold.