If you just go to google and search for inventory management software, you will be flooded with options. Too many choices can make anyone feel dizzy.
Now, let’s assume that you snapped out of the dilemma and have selected one Inventory Management Software for your business. How would you know if the software you selected is the right fit for your business or not?
World of ecommerce is very fast-paced, and you don’t have time to choose the best Inventory Management Software using trial and error method.
This article is written for all the aspiring small ecommerce businesses out there who are willing to switch to inventory management software for their inventory management but don’t know which one will better fit their business layout and exactly what to expect from a modern-day inventory management software. Also, for all the manufacturers interested in Inventory Management Software, there is one bonus tip at the end of this article.
What is an IMS?
A robust and scalable technical solution for all ecommerce businesses, an inventory management system is a software or a SaaS to assist you in Order Fulfillment. Inventory Management System, also known as IMS, helps you manage your ecommerce business by keeping a keen eye over your inventory. Right from purchases to the storage, packing, and shipping, and finally, to the delivery of the product, inventory management effortlessly tracks down your inventory.
If you are mesmerized by the mere definition of Inventory Management System, well, Calm Down. For someone switching from excel to inventory management software, it seems to be too good, right? So should you hop in and purchase an Inventory Management System? No!. The tug-of-war between organizations for developing a doped yet straightforward with features inventory management software benefits the ecommerce industry a lot. A modern-day inventory management system is much more capable than merely managing your inventory. All this within your budget.
Here are the reasons on what to expect from a modern-day inventory management software.
- Clear visibility of inventory in the Amazon fulfillment center
Almost all inventory management software out there offers you a wide variety of integrations for you to work efficiently.
Amazon FBA should be one of the integrations. In today’s era, one should expect their inventory management system to have clear visibility in their amazon fulfillment center inventory after the integration.
Moreover, you should also have the feature of listing your FBA items on other sales channels and fulfill orders from different channels using Amazon FBA. (also known as Amazon MCF)
According to a survey,
Only 15% of U.S. retailers have completed supply chain digitization.
The study further reveals,
49% of businesses have not started digitizing stating the main factor preventing them is the cost. With the advent of subscription based Inventory Management System, digitizing your business is now within your reach.
2. Gives automated customer level discount
Your Inventory Management Software must be capable of offering customer-level discounts. Why? You may ask.
Because in the retail business, retaining old customers are as crucial as acquiring a new customer. If you have a customer that is loyal towards your brand, you would definitely want to retain him/her for a long time. What’s better than a personal level discount offering for all those loyal customers?
In fact, according to a survey of 200 retail marketing executives, 40% of respondents said that adding personalized elements on their websites and adopting personalized marketing tactics helped boost their sales and average order value
35% have seen an increase in transaction frequency as a result of their personalization strategy
3. Security Features (Hierarchy level security features)
Let’s assume a scenario where you got an Inventory Management Software for your business. You are pretty happy with it and all its capabilities.
You want to share the software with your warehouse manager for efficiency in warehouse management. The problem is, you can’t set a custom level security. Meaning, you share your software with your warehouse manager, he can access all your valuable business information. Regarding your orders, shipments, returns, revenue, all of them. Are you comfortable with others having access to all that crucial data? Obviously No, right? This is why in this modern era, one should expect their IMS must have User Level security feature enabled in it.
4. Dynamic Automation Rule Options
DARO or Dynamic Automation Rule Options is another must-have feature to look out while opting for Inventory Management Software. Let’s understand it with the help of an example.
Suppose Mr. Will and Mr. Todd are two customers who would like to purchase shirts from you whenever you have new stock available. The catch here is, Mr. Will likes only red shirts while Mr. Todd specifically needs blue shirts due to increased demand in his area.
As the name suggests, with Dynamic Automation Rule Options, you can set Red and Blue as Options for the appropriate customers. DARO in real-life scenarios is specifically beneficial in selecting different shipping partners based on regions because no shipping partner covers all the areas. Without regional filtering and selecting a single shipping partner is going to burn holes in your pockets.
5. FTP for Order export, inventory import, shipment import
Migration from manual inventory management to automated inventory management system need not be a painful manual and mundane process.
You can expect a modern-day IMS to support File Transfer Protocol(FTP) for all your old orders and inventory to be transferred to inventory management software.
Simply exporting the excel sheets to XML or JSON format and importing the file in your inventory management software does the magic. So simple but yet crucial element that you need to check before you invest in any inventory management software.
6. Summary and Reports
We all want to get appreciated in some way or the other to keep us motivated. Order Summary and business reports are helpful in this domain. Not only it motivates us to keep up the good work, but also it gives us critical insights into our business.
Like sales report, revenue generated report, inventory stock report, shipping summary report, and many many more. You can set your business goals and visualize your progress with reports. Summary and Reports are valuable business data that you may need to send to high authorities within your organization for expert advice. As such, your Inventory Management System must have the automation feature to export it to Microsoft Power BI or automate mailing it to the appropriate person.
7. Landing Cost
Business used to be way simpler during our childhood days. When the cost of purchasing an item is known as Cost Price, the Price at which you sell the item is known as Selling Price, and the difference between the Selling Price and Cost Price is known as Profit.
The real-life scenario is not so simple. We need to take care of multiple factors before deciding the selling price. For example, labor costs, transportation, warehouse costs, etc. Let me explain to you with the help of a simple example.
Suppose you bought 100 items for 10 USD each from your supplier. So in total, you spent 1000 USD, that’s your cost price.
Now assume you spent
400 USD freight cost
100 USD customs, duties and taxes
100 USD currency conversion
400 USD insurance
So in total, you spent around 2000 USD for 100 items. This translates to 20 USD per item: Thats, your landing cost. Although your per item cost price was 10 USD, if you sell the items for less than 20 USD, you will be in loss. Finding landing costs is crucial for any ecommerce retail business. Otherwise, businesses will face heavy losses. Make sure to mark this feature on your checklist before investing in a modern day Inventory Management System.
8. Customized Development
You didn’t find the feature you were looking for? Worry not. This is the new generation of customized development.
As an ecommerce retailer, you know how your customers love those little personalized offers. Then why do you need to be exempt from having your own personalized IMS? No one better understands your business than you, and that means that you know exactly what you need to run your business smoothly.
If you feel for it, you can always choose to have your very own feature by contacting your IMS vendor and asking them to develop it. It may not be a must have feature for now, but it certainly will help you to know that your IMS vendor is well capable of providing such features, in the long run, may the need arise.
Bill of Materials for Manufacturers
A manufacturer never manufactures one single monotonous product. Rather he will have many customized models of the product targeting different range of customers. As such, it is always challenging to find out exactly how many different units a manufacturer can manufacture with his existing inventory.
Modern day Inventory Management Software is equipped with features such as the bill of materials. A Bill of Materials (also known as a BOM) is a comprehensive list of components, objects, assemblies and other materials needed to create a product, as well as instructions to obtain and use the materials required.
BOM helps manufacturers by not only showcasing the items needed to manufacture the end product, but also display the no of items present in the inventory and the no of end products the manufacturer can manufacture with present inventory. Having a BOM enabled Inventory Management System is always a nice idea for all the manufacturers to track your inventory and replenish it accordingly to maximize the end manufacturing product.