While the average US retail operation has an inventory accuracy of only 63 percent. In this case, it's no wonder businesses experience so many inventory issues, right? 📦 These challenges, including stockout and overstock, not only affect profitability but also impact customer satisfaction. Achieving better inventory visibility is crucial in addressing these issues effectively. That’s why, in this article, we'll delve into what inventory visibility is, its benefits, challenges, best practices, and tools to improve inventory visibility! Let’s start! 🚀

What is Inventory Visibility?

Inventory visibility is the capability of monitoring up-to-date stock levels across the entire supply chain. It involves having accurate information about the location, quantity, status, and journey of products.

Inventory visibility supports eCommerce businesses in making successful decisions and optimizing their operations. How? 🤔 This is achieved through accurate data collection and integration with other systems. For example, when you can track inventory in real-time with improved inventory visibility, you can know exactly what is in stock and where it is located. Besides integrations with other systems like sales, marketing, or production, all departments have knowledge about the latest issues and can respond quickly to changes. This comprehensive view allows eCommerce stores to make more reliable decisions, fulfill orders on time, and satisfy customers.

Now, let's explore further why it's an important factor for your eCommerce store with an example.

Importance of Inventory Visibility for eCommerce Brands

Selling without knowing your stock levels is like flying a plane blind. Just as a pilot 🧑‍✈️ cannot fly safely without visibility and knowledge of the plane's status, an eCommerce store owner cannot run a profitable and efficient business without knowing their inventory situation.

💭 Imagine running a Shopify apparel store where one of your products, let's say a t-shirt 👕, is selling rapidly due to a sudden trend. You remember you experienced similar situations before, but no historical data or successful post-purchase analysis can guide you during decision-making. As a result, you're uncertain about how many more of these t-shirts to order.

You end up with such questions:

• Should I order more of this t-shirt to meet current demand, risking overstock if the trend fades? 🤔
• How will the high demand for this t-shirt affect sales of other products in my store? 😟
• If the trend suddenly ends, how can I avoid being left with excess inventory of this t-shirt? 😳

These uncertainties arise because you cannot analyze and manage your inventory effectively. This is where inventory visibility got blurred for you. 🌫️ Without clear visibility into inventory, businesses may struggle to meet customer demands effectively, manage sales, sustain customer satisfaction, and stay profitable.

In short, better inventory visibility equals making reliable demand forecasting, evaluating data in detail, and creating better future inventory plans easier. Is that all? Of course not. Let's delve deeper into the benefits of inventory visibility together.

Inventory Visibility Benefits

📊 Optimal Stock Levels

Keeping stock levels optimal is your number one concern when managing an eCommerce store because out of stock and overstock cause you to waste money and time. Better inventory visibility prepares your store for future demand as closely as possible so that you have enough inventory to meet customer demand without having excess stock.

• Do you lose revenue due to being out of stock often? You can start accepting backorders with Fabrikatör, keep selling even when you’re out of stock, and generate cash flows. After you understand how it works, it brings many benefits to your eCommerce store. Read Ultimate Guide: Backorder & Preorders and How to Manage Backorder on Shopify & Best Practices for more information.

🔮 Better Demand Forecasting

With better inventory visibility, you know your inventory's quantity, variety, and sales volume, making planning and analyzing future sales trends much easier. With high inventory visibility, you can forecast demand better and run your eCommerce store more efficiently, especially if you have an apparel store that often requires seasonal demand forecasting. This is because accurate inventory data helps you plan ahead, avoid stockout, and make informed purchasing decisions based on upcoming trends. As a result, you can make sales decisions with foresight and confidence.

🛍️ Improved Customer Experience

Inventory visibility is crucial for enhancing customer experience in eCommerce. With real-time insights into inventory levels and sales trends, businesses can ensure products are available to meet customer demand. This prevents stockout, which is a common source of frustration for customers. Accurate inventory data also enables eCommerce stores to provide reliable delivery estimates and streamline order fulfillment processes. This reliability builds trust with customers, leading to improved satisfaction and loyalty.

💰 Reduced Supply Chain Costs

Several factors can increase supply chain costs, such as inefficient storage and unoptimized operations. 🚚 Improving inventory visibility throughout your supply chain allows you to better understand where, when, and how much inventory you need, which can significantly reduce supply chain costs. For instance, identifying excess stock for a product that causes unnecessary warehouse costs enables you to improve and optimize processes accordingly. With better inventory visibility, businesses can manage procurement processes more efficiently, negotiate better with suppliers, and optimize transportation routes to decrease operational expenses and improve profitability.

🔄 Smart Resource Allocation

Inventory visibility is also beneficial for eCommerce operations in terms of making market resource allocations. When eCommerce businesses have clear and up-to-date inventory insights, you can effectively allocate warehouse space, staffing, and transportation resources. For instance, adjusting staffing levels based on real-time demand forecasts helps you to make order processing more efficient and satisfy your customers. Similarly, optimizing warehouse layouts based on inventory visibility enhances storage efficiency and lowers operational costs.

Inventory visibility provides benefits like optimal stock levels and better demand forecasting. However, growing eCommerce brands face several challenges in achieving this. Let’s explore some common inventory management challenges of inventory visibility.

What are the Challenges of Inventory Visibility?

Achieving precise inventory visibility involves overcoming several obstacles, such as:

🛠️ Manuel Processes

Managing the inventory process manually is a significant challenge because it involves tasks such as counting stock, recording inventory movements, and updating records by hand. These methods are time-consuming and error-prone, especially if you use Excel for it. These methods cause delays in updating inventory data and make it difficult to maintain accurate real-time inventory visibility. The imbalance between actual inventory levels and recorded quantities can cause inaccurate forecasts and stock issues.

🏢 Warehouse Organization Issues

Poor warehouse organization can be a major challenge for inventory visibility. When product labeling is lacking, bins and pallets are inconsistently sized, and product flow is poorly organized, it becomes difficult to track inventory accurately which decrease the inventory visibility.

💸 Cost

Initial costs associated with implementing automation software can be daunting. However, investing in the right tools can lead to significant long-term savings by improving inventory management, reducing errors, optimizing supplier relationships, and increasing your store’s inventory visibility.

Even though achieving and maintaining inventory visibility is a challenge, there are effective practices for eCommerce brands to improve their stores’ inventory visibility. What are those?

Best Practices to Improve Inventory Visibility

1️⃣ Implement Barcode Scanning

One of the most efficient ways of improving inventory visibility is implementing barcode scanning. When you set up a barcoding system involving unique barcodes for all items and train warehouse staff on proper scanning techniques, you can track your inventory process accurately, from receiving materials/products to shipping them. 📦 In this way, you can minimize manual errors.

2️⃣ Standardize Inventory Processes

You can standardize your eCommerce store’s inventory process with documented standard operating procedures (SOPs) to have consistency in inventory management practices and accordingly have optimal inventory visibility. Setting clear procedures for receiving shipments, storing items, fulfilling orders, and controlling processes helps to maintain data up-to-date and increase inventory visibility.

3️⃣ Leverage Reliable Data Analytics

Using comprehensive data analytics 📊 increases inventory visibility. eCommerce stores need detailed and real-time data to understand inventory movements, sales trends, and customer demand so that they can make informed decisions. Analyzing this data provides a chance for accurate forecasting of future inventory needs and optimal stock levels.

4️⃣ Train Your Employees

Training staff is essential for successful inventory management and inventory visibility. Ongoing training programs on inventory management systems, barcode scanning, and data analytics help employees to have the knowledge to maintain accuracy and efficiency for eCommerce stores. Encouraging employees to take responsibility for inventory accuracy and promoting open communication between departments is important for improving inventory visibility and operational performance.

5️⃣ Use Inventory Management Software

As we all know, as the number and variety of products increase and your eCommerce store starts to grow, managing your data manually becomes nearly impossible, or at least inefficient. One of the most important practices for improving inventory visibility is using an advanced inventory solution that allows you to track your stock in real-time, plan future inventory effectively, monitor the current sales analysis of your products, and integrate seamlessly with key applications. But, which software can you confidently rely on for the inventory management of your eCommerce store?

Fabrikatör to Gain Inventory Visibility

Fabrikatör is here to ensure you have access to all real-time details related to your inventory. Track in real-time what's happening in your inventory, monitor the current status of products, and increase your inventory visibility!

With the 5/5-rated Shopify app Fabrikatör, you can immediately automatize and fasten your inventory management process and boost your store’s inventory visibility! How? With many advanced features:👇

📊 Gain actionable insights for informed decision-making.

📝 Fasten ordering processes to create purchase orders in seconds.

🚨 Receive notifications for low stock levels and replenish your stock on time.

📦 Accept backorders and keep earning revenue during out of stock.

📈 Predict future customer demand and prepare your inventory.

🚚 Improve your shipping strategy and reduce unnecessary costs with Freight Planning!

Would you like to see all these features and more firsthand and ask all of your questions? You can schedule a free 30-minute meeting to see Fabrikatör in action!

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