Your inventory and operations are the plumbing of your day-to-day ecommerce success. Having the right setup can save you from messy books, depreciated products and a high order defect rate (ODR).
For the multichannel merchant, it’s evermore critical to get your ducks in order. Amazon, eBay, Walmart and other marketplaces each maintain high standards; a spike in backorders or defective shipments can lower your seller ratings and ultimately get your account suspended—potentially forever.
Case in point:
[I’m] hoping somebody can urgently help me. [Our] account was suspended back in April this year of a 5% ODR rate and 60 days later we are now on 0% ODR. [Despite this,] we have appealed many times and our appeal has been rejected by Amazon to the point that they now say our suspension is permanent. I have been banging my head against the wall to reinstate my account...Everytime I send an action plan, it takes weeks or even months for them to answer me and I just feel [I’m] at their mercy...” - Seller on Amazon Seller Forum
It often just takes one oversight or one influx of orders to expose weaknesses in your inventory system. Make sure you’re prepared by understanding the topics covered in this eBook:
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“Good inventory control keeps everything from your order fulfillment to warehouse organization flowing smoothly. It reduces time spent picking, packing, and shipping products; increases inventory turnover; and boosts inventory accuracy.
So how do you measure the health of your inventory management? Fortunately, there are some tell-all signs that you can uncover just by asking yourself a few basic questions:
1. How is your order defect rate (ODR)? Is it on par with expected ODR for your industry, item category, and channel? More importantly, what’s causing it? Order defects from out-of-stock, incorrect, or slow shipments are clear signs of poor inventory control.
2. Are you frequently overselling on products? As orders fly in from multiple business lines, it’s easy to lose track of how many of each product is listed on which channels. How are you keeping available stock levels consistent and accurate across all your channels?
3. Do you often have too much stock on hand? Having excess stock can be just as bad as not having enough, with consequences including high shrinkage, high lead times, and storage problems that prevent you from offering better products. Not to mention, the more money you tie up in inventory, the less you have to devote to other operational costs.
4. How do you handle kits and bundles? Offering kits and bundles can give your business a competitive edge but can quickly become logistical nightmares when you have thousands of SKUs to manage. Think: incorrect orders, miscommunication between distribution centers, and complicated inventory tracking. Do any of these affect you?
5. How do you track unpaid orders? Are you able to reserve inventory while payment is pending (to avoid overselling) without sending orders to your warehouse (to avoid shipping items before they’re paid for)?”