Are you a growing eCommerce store? Keep it under control!

Aug 25, 2018

As the owner of a growing webshop, a lot is coming your way. Your hands are full with handling orders, and in the meantime, you have to keep your stock up to date. If you want to achieve better margins, then you should consider these five challenges. 

  1. Overview
    Keeping an overview is one of the biggest challenges of a growing webshop. When you start, you succeed on feeling, but as soon as the number of (different) products increases, it becomes more difficult. Which products are in stock where? What should I order? Is my Excel sheet still correct? The faster the growth, the more complicated it becomes. Are you running behind the facts? Then try to automate certain operations. There are various software solutions that can take a lot of work out of your hands. This way you win speed and reduce mistakes.
  1. Purchasing process
    The wider the variety of products you sell, the more you want to have in stock. After all, selling ‘no’ is disastrous. Nevertheless, that does not mean that the stock has to grow proportionally with the turnover. The bigger you are, the more flexible you are to buy more often and thus respond to trends in the market. Holding large amounts of stock is done at the expense of your working capital, which is money that could be spent on SEO optimisation or marketing. However, that is not to say that large purchases are out of the question. For some products, such as telephone sleeves, it can even be smart to buy large numbers at once because keeping them in stock costs very little. As a webshop owner, it is up to you to devise an efficient strategy. As a rule, webshop owners who buy by feeling save an average of around 30% on their stock. Our most important tip: do not be tempted by discounts for large quantities, and to purchase stock that will last several months at most. 
  1. Deadstock
    Deadstock is merchandise that is unlikely to sell and is usually the result of holding too much stock. There is nothing more annoying than holding products in a warehouse that cannot be sold anymore. However, deadstock is part of the game.  As an ambitious entrepreneur, you dare to take risks. After all, you do not want to sell out of stock and be unable to satisfy your customers. Unfortunately, not every purchased product is a success, and it is vital to know how to reduce deadstock. You should think carefully about your purchases, monitor which products are performing well and which are not selling. Look at competitors and take trends in the market into account. In short: do not get stuck with lots of products that you will never sell again. This data can be managed in an Excel sheet until the business grows significantly, and then specialist software offers a more comprehensive solution. 
  1. Space
    A recognisable scenario for many webshop owners: at the point where the garage (of your father) is no longer sufficient you must decide what type of premises to rent. How much space do you need? At which location? Ideally, as a webshop owner, you choose a flexible building in which you rent more or less space, depending on the stock you are holding. Preferably also with a short rental period. Simply renting a box can be a solution in some cases. If you are considering opening a shop or pick-up point in the future, then it is advisable to think about the location in advance. A building on an abandoned industrial estate may be a smart move for cost reasons, but it is not an appealing location for a pick-up point or a shop. To illustrate: in the regions of Friesland and Twente, the rent is far cheaper (on average around 30 euros per square metre per year) than in the Hague, Gooi, and Eemland (on average more than 45 euros per square metre per year). If you are flexible, then you can also choose to outsource the entire logistics process to a company like Active Ants or Hexspoor E-fulfilment, among others, who offer comprehensive fulfilment solutions. 
  1. Time
    The bigger you get, the more time you need to process orders correctly. You also have to keep your stock up to date and make sure everything is in the right place. As orders increase, it becomes more and more challenging to ensure that all processes run smoothly. Therefore, your processes should be structured to avoid chaos. For example, weekly stock checks should be conducted, and stock levels recorded to prevent any problems from escalating. 

Conclusion: acting on intuition and operating from your father’s garage will no longer suffice at some point. Keeping an overview, optimising your stock, limiting deadstock, letting your business grow, and making sure you have enough time to do everything right are the challenges of a growing webshop. If you want to avoid getting into difficulties, then make sure your work processes grow with you. Free tip: you can quickly solve many (imminent) problems by automating your stock management with a warehouse management system (WMS) such as Picqer or Fulfillment Software. There are already packages starting at as little as 100 euros per month.

 

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