Importance of Inventory Management Continues to Grow as More Customers than Ever are Shopping Online

Consumers are turning to the Internet in droves in order to find a good deal. Many people have been attracted by the convenience of shopping in this way while others have looked to save money over what they'd expect to pay at local retailers. Most of the news coverage on this issue has thus far looked at this side of the equation.

Online retailers certainly are drawing business away from physical stores. However, they're also beginning to compete with one another. As soon as someone starts selling products on the Internet, they're competing with firms all across the world.

Due to this fact, companies are continuing to try to find new ways to get an edge on one another. Many have begun revamping their inventory management techniques in an effort to streamline operations and reduce costs.

Discovering New Management Techniques

Perhaps the most obvious trend is the recent focus on companies who change the software they're working with. The simple act of switching to a different inventory management platform can mean all the difference for firms that are having a hard time tracking the products and services they're attempting to ship.

Larger established online retailers have made it difficult to gain any meaningful level of market penetration. Amazon, AliExpress and eBay have positioned themselves as major leaders in the industry because of the way that they manage inventory.

Keep in mind that these three companies seldom fulfill customer orders from their own supplies. Amazon contracts with other organizations to fill warehouses and then uses third-party delivery services to get products and services to users on time. AliExpress is functionally a drop shipper for outside parties while eBay often distributes new and used merchandise for huge somewhat automated sellers.

This is a far cry from the days when all three sites were powered mostly by individuals selling whatever they had on hand at the time.

These firms all manage their supply chain operations in much the same manner, however. They leverage the power of AI-based technology to ensure that they can find distribution networks that have certain goods to fulfill customer orders faster than they'd otherwise be able to.

Small business owners might not even be completely aware of all the products they currently have in stock. This makes it difficult for these firms to compete, since users might not even be able to purchase products as a result of confusion over listed products.

When these firms adapt a platform that works well for them, they're in a better position to attract buyers who might have otherwise incorrectly thought something was sold out.

Breathing New Life into Old Sites

A majority of online shoppers have happened across sites that advertise certain products for sale yet no longer appear to be in business. In more than a few cases, these businesses are actively stocked but poorly implemented Inventory management solutions have inaccurately shown certain items as out of stock.

Each time this happens, an independent proprietor loses a sale. Sites like Amazon and other similar large retailers don't normally have this problem, even though they do still have plenty of stubs pointing to products no longer on the market.

Automated inventory software manages a supply chain, so it can order goods from a vendor whenever someone wants something that's currently out of stock. The system can fulfill the customer's order without intervention.

From the consumer's point of view, the product was never missing to begin with. It's shipped to their home or place of business quickly. While the process is somewhat similar to drop shipping in theory, it's become one of the biggest business trends this year because of how much more flexible it tends to be compared to traditional third-party fulfillment services.

This flexibility comes from sophisticated machine learning subroutines that calculate what users are most likely to order.

Fulfilling Orders Before They're Placed

According to a recent market research study, around 84 percent of consumers claim that they won't buy from any brand they've had a poor delivery experience with in the past. Business owners are desperately searching for new ways to prevent these from happening.

Software developers have created systems that calculate the probability of any particular good or service being purchased based on past performance and other metrics. Local warehouses can store the most sought-after goods to prevent supply problems. With the third-party logistics industry predicted to be worth over $925 billion in the next year, there's no reason business owners can't rely on outside interests to fulfill other orders.

Non-traditional Retailers are Now Leveraging Inventory Technology Too

Regional pawnbrokers have undergone a series of major consolidations in the last few years. This industry is unique because pawnshop inventories tend to be in flux all the time anyway.

As these businesses start to sell online, they need specialized apps to manage their products, however. This can help them attract sales that would otherwise go to established retailers.

Regardless of which sector a particular business has elected to operate, it's obvious that many firms will continue to invest in inventory management technology as customers continue to take their purchases online.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes.