E-Commerce Inventory Problems: How They Affect Your Business

Whether you’re selling on Amazon or your online store or through a profitable Omnichannel strategy, good inventory management is critical to your success.

Despite all your best efforts, however, you can’t always manage to prevent all the complications that arise, even with correct and foresighted management.

But let’s go into more detail and see how inventory problems can compromise your sales activities and the key points of a prudent strategy of monitoring and controlling of stocks.

E-Commerce Inventory Problems

Availability of Inventory

The unavailability of stocks is one of the most common inventory problems that an e-commerce business can face. It is somewhat obvious, but no less problematic.

It can be assumed that anyone who wants to buy a product from you is equally willing to buy one from your competitor. And if you sell on Amazon, you don’t have a single competitor, you have dozens or even thousands. Therefore, if products are going out of stock or already out of stock, you will essentially be promoting the products of your competition.

Amazon, Facebook and other platforms do not limit the ads to the availability of the products. Instead, they will continue to keep the ad public, even when your product is running out or out of stock.

Most marketplace platforms will suggest another product present in the warehouse, immediately after the sold-out product has been clicked on: this means that your competitor’s product will be shown.

One thing to do is integrate automated reordering tools: these will allow you to solve the inventory problems related to the exhaustion of an item, directly avoiding this.

You will have to manually adjust the quantitative levels for each product, whenever you intend to launch promotions and offers that could result in a faster depletion of stocks. Which is always desirable, isn’t it?

Amazon “Darks” Sold Out Items

By default, Amazon hides all sold-out products from search results to any user who has not knowingly selected the option to see also out of stock items when searching.

Items that are no longer in stock or their availability in small quantities negatively impact your organic ranking and Amazon SEO – and at that point, it will no longer be a matter of managing a “simple” inventory problem: rather, you will have to witness a drastic decrease in your e-commerce sales, even once your product is available again.

It can happen (and it is frequent) that a large part of your marketing efforts on Amazon is aimed at increasing your organic ranking, and that all your hard work is negated precisely by the products being “out of stock”.

What to do in these cases?

Much of the rankings you had earned before stocks ran out can be recovered using a promotion or coupon, to be able to make a large number of sales and warn Amazon that your product is back in the running.

However, the best medicine for e-commerce inventory problems is, once again, prevention. If you can avoid your inventory or your FBA (Fulfilment by Amazon, or service offered by to help sellers to manage stocks) registering items as out-of-stock, your ranking will benefit a lot.

Store Inventory Issues on a Marketplace: Customer Feedback

Undoubtedly, e-commerce inventory problems affect the customer experience. Whether you receive items late, or you get a wrong or damaged product due to rushed or improper shipments, poor inventory management adversely affects the customer experience.

These customers will not hesitate to leave negative reviews, to tell other users about their experience and even to make it known on their channels. This will seriously damage your brand and affect the effectiveness of your marketing by reducing conversion.

Supply Chain Problems Increase Product Cost

Whether you have too many supplies or you don’t have enough of them, this will increase the final cost.

Switching to inventory management through efficient solutions, such as the Just in Time (JIT) model or similar, will give you more flexibility to reduce costs, lowering those items in FBA or your warehouse.

However, it is necessary to balance storage costs with pipeline costs, such as shipping, loading and unloading and processing of products in your warehouse. Once you find this balance, you will save considerably on those stocks that accumulate in your warehouse.

Although there is no single solution to an e-commerce inventory problem, there are many remedies that you can take to analyse and test to cut costs.

Conclusion

E-commerce inventory problems can be avoided with correct and wise inventory management, which will act by improving every aspect of your business activity, including the results of your marketing.

Although the perfect solution does not exist, the recipe for solving e-commerce inventory problems can take advantage of the numerous options of its management, which depend on the size of the warehouse, the type of product and its life cycle.

In this regard, we suggest you read our article on how to improve e-commerce management with full outsourcing management.

The last tip is to experiment with your ERP (Enterprise Resource Planning), to automate processes and improve efficiency, to find out what works best for your e-commerce.