Most eCommerce businesses lose billions of dollars annually because of inaccurate inventory information. They experience revenue loss due to stock issues and conflicts with their suppliers. However, you can improve inventory accuracy and increase eCommerce profits easily. In this article, we’ll dive into details on all you need to know regarding inventory accuracy and how to optimize it for eCommerce success. Let’s dive in!

What is Inventory Accuracy? 📦

This is described as measuring how well your recorded inventory level corresponds with what you have available for usage. But what if your system says you have 100 pieces in stock and only have 90 on hand? It means that your inventory is not accurate.

Maintaining inventory one-to-one, as in an eCommerce business, is crucial. It lets you track your stock levels correctly, replenish stock on time, avoid excess and out-of-stock inventory problems, inform customers about product availability, and prevent financial losses. Let’s dive into more detail to understand its importance better.

Why is Inventory Accuracy Important for Your eCommerce Store? 🤔

Keeping inventory accuracy high is key to running a successful business. Here’s why:

Eliminate Stock Issues with Accurate Inventory 📦

Nothing frustrates customers more than ordering something that’s out of stock. By keeping accurate records, you can avoid these letdowns and ensure you have what they want when they want it. It’s all about keeping your customers happy and coming back for more!

📌 When there is an unexpected stockout, you can continue to sell and increase your cash flow by accepting backorders. Read How Does Backorder Work? ****for more details.

Build Better Relationships with Customers through High Inventory Accuracy 🛍️

When your inventory is spot on, you can confidently tell customers what's available and what's not. This builds trust and makes their shopping experience smoother. Happy customers will likely return, and strong relationships are the foundation of any successful business.

Avoid Potential Conflicts with Suppliers by Keeping Inventory Accurate 🤝

Accurate inventory helps you with your customers and keeps your suppliers happy. You can place timely orders without delays and misunderstandings when you know what you need. This makes communication smoother and helps ensure you always have the necessary products.

Eliminate Unnecessary Costs with Inventory Accuracy 💸

Having too much or too little stock can hurt your profits. Overstocking ties up cash in products that aren’t selling, while understocking can lead to missed sales. Keeping your inventory accurate can help you order what you need, reduce costs, and boost your bottom line.

Since we understand inventory accuracy is important, it’s time to calculate and evaluate it efficiently for eCommerce success.

How to Calculate Inventory Accuracy? (Using Inventory Accuracy Formula)

Calculating inventory accuracy is crucial for effective inventory management, and there are two primary methods to do so:

1️⃣ Physical Inventory Counting

This involves reconciling physical counts with recorded inventory to identify discrepancies. To start, conduct a physical count of your available inventory and compare it to your expected inventory levels. Use this formula to determine your inventory accuracy rate:

If the counts match, your inventory is accurate. If not, a discrepancy exists. For optimal results, conduct weekly checks to monitor your inventory consistently.

2️⃣ Inventory Valuation

This accounting practice calculates inventory accuracy by assessing the value of your physical inventory and comparing it to the expected inventory value recorded in your inventory tracking system. While this method is less precise because it doesn’t evaluate each item individually, it can still provide insights. If you notice low accuracy, reviewing sales receipts may help identify missing inventory due to sales.

Utilizing these methods can enhance your inventory management practices and address discrepancies effectively.

How to Improve Inventory Accuracy? 🔧

Keeping inventory accurate is essential for running a profitable and smooth operation. Reliable inventory data improves decision-making and protects your profit margins. Here’s how to stay on top of it:

🕵️‍♂️ Control Stock Regularly: Keeping inventory accurate takes ongoing effort. You must regularly check stock levels, update product statuses, and ensure all data is current. You can do this if starting in eCommerce with a smaller inventory. However, as your product range and business grow, maintaining inventory accuracy manually becomes much harder. Using Excel especially can make things tricky—manual entry errors and limited tracking options can lower inventory accuracy significantly, leading to decisions based on unreliable data.

👥 Train Your Team: Your team plays a crucial role in keeping inventory accurate. Ensure everyone involved in inventory handling is well-trained in best practices, from accurate counting to proper data entry. This is especially important if you’re not using an automated solution.

🤖 Use Technology for Accuracy: Tools like barcode scanners and RFID systems can drastically reduce manual errors, making tracking faster and more reliable.

💻 Invest in Inventory Management Software: An automated inventory management solution is the best way to maintain inventory accuracy consistently and easily. This way, inventory data is updated automatically and accurately, allowing you to make informed decisions based on current inventory levels. If you’re unsure with which software you can achieve this, consider Fabrikatör!

Fabrikatör: Your Secret Weapon for Accurate Inventory Management 🛠️

Fabrikatör is designed to help growing eCommerce stores overcome inventory hurdles and manage their inventory more efficiently. It offers many advanced features to keep stock levels balanced and inventory accuracy high for eCommerce success.

If you’re curious about how to improve inventory accuracy with Fabrikatör, here are several ways:

• 📊 Fabrikatör provides real-time updates on your inventory levels. This ensures that you always have accurate information, allowing you to make informed decisions and avoid stockouts or overstocking.
• 🛠️ With automated reordering, Fabrikatör helps you maintain optimal inventory levels. When a stock reaches a predefined threshold, it triggers a reorder, ensuring you always have the right amount on hand.
• 📈  Access to detailed analytics and custom reports allows you to spot sales trends and plan for seasonal demand. By understanding your inventory needs better, you can adjust your stock levels accordingly, improving accuracy.
• 🔄 Efficient Integration: Fabrikatör seamlessly integrates with other tools, making it easier to manage your inventory across different platforms. This reduces the chances of errors that can arise from manual data entry and helps maintain consistency.
• 📦 Fabrikatör analyzes past sales data to help you predict future demand accurately. This allows you to stock the right amount of products, eliminating imbalances between what your system shows and what you have, ultimately leading to better inventory accuracy.

And much more!

If your eCommerce store is growing, leveraging Fabrikatör is one of the most efficient inventory management solutions to improve inventory accuracy.

If you need more information, you can see Fabrikatör in action in only 30 minutes!

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