Tuesday, September 02, 2008

Manage your Inventory This Christmas!

Most eBay sellers will admit that they have more problems with inventory management during the 4th quarter, than any other time of the year. When you sell on a marketplace, poor inventory management can put you out of business:
  • Amazon, doesn't have a very understanding attitude when sellers don't manage their inventory well. If you have to refund too many orders, because of stock outs, or you get too many negs because of the bad experience, Amazon will suspend your account and once suspended it is difficult to get back in.
  • eBay is now cracking down on sellers who have these types of problems also and while you may not be kicked off the site for less than stellar performance, you will get disadvantaged in search.
As you get ready for the 4th quarter, take this time to fine-tune your inventory management processes. This is especially important for those sellers who buy from distribution (virtual inventory) or those sellers who use dropshippers. Rather than selling those items that your vendor shows in limited supply, make sure to list those items that have plenty of inventory.

This does limit the long-tail product, especially in the media category, but if a high percentage of those items have inventory problems, what good is it to sell them. Consider the downside to listing those items, just to get the incremental sale.

If you sell on multiple platforms, you need to develop a strategy for your inventory. For example Amazon usually has a huge Christmas, while eBay does real well, but this year that is in question. Identify which items sell best in which marketplace and adjust your inventory to get the most bang for your buck. Do not list the same inventory on multiple marketplaces unless there is sufficient quantity.

This year more than ever before, poor inventory management, may have a real downside for your business.

Just my 15%

1 comment:

Scott Pooler said...

Not a small headache at all, this subject is a huge barrier to scaling businesses up.

Systems, Systems Systems....

Invest in the software and other tolls which make inventory management into a system, without making these choices early, your business may be late to profitability.

Great Post Randy! Keep em comin!