With larger retailers selling hundreds or thousands of items on multiple channels, the back-office management of an eCommerce business is critical to get right. There are several complex jobs to manage effectively for a smooth-running business.
Inventory Management and Product Listing
Product details must be managed and published across multiple channels. This includes:
- Descriptions. Descriptions should be detailed and contain relevant keywords (see SEO chapter)
- Photos. Ideally, multiple high-resolution images for each product.
- Categories. Chosen to represent the product best.
- Attributes. Product details such as weight, size, colour are helpful for customers and help with search filtering.
- Channel linking detail. Individual channels each have data requirements.
Managing product details across multiple channels without a central management system (sometimes referred to as a PIM or Product Information Management system) is impractical as SKU number increases. Channel management tools such as Linnworks and Veeqo include this functionality as part of their design.
Channel Management and Product Listing
For each active sales channel, the merchant needs to publish the product details (known as listing products) and manage sales. If the same inventory pool is used to list across multiple channels (i.e., ten items in stock are listed as ten available on Amazon, ten on the website, ten on eBay etc.), then a live link will be needed to update stock levels in real-time.
Order Management and Shipping
When a customer makes a purchase, they are promised a certain level of service, which maps to a combination of services with the merchant. For example, a ‘standard’ level shipping service on Amazon might require that the product be sent via the Royal Mail 48-hour service. To dispatch an order, the merchant will need to:
- Map an order to a delivery service.
- Pick orders for delivery (see below)
- Print courier labels and packing slips/invoices.
- Pack products and attach labels.
- Mark items as sent in the system and with the channel.
- Send confirmation email.
As order volumes grow, printing shipping labels is very time consuming, and an automated system should be used.
Warehousing
As your business grows, so will your warehouse, and you will quickly not be able to find anything unless you have a system for organising it. Three related warehouse activities need to be supported:
- Deliveries. Incoming deliveries need to be compared against purchase orders and stored in the warehouse in known locations.
- Picking. Once an order is received, it needs to be retrieved from the warehouse by creating a ‘picking list’.
- Stock checking. To confirm stock levels, perform frequent stock checks against the recorded inventory levels.
Managing Stock Levels
Getting stock at the right time is one of the biggest headaches in retail or any company that sells physical products. If you do not have enough inventory, you run the risk of running out of stock or ‘stocking out’ and missing sales. On the other side, if you have too much stock, you will have money tied up in inventory that could be better used.
There are MBA level courses on keeping the correct stock levels. However, if you are trying not to stock out when your supplier still has stock, then there are a few figures you need to record:
- Daily stock sales when in stock
- Time between orders
- Time to deliver.
Using this information, you can calculate your stock levels:
- Reorder quantity. The daily sales x time between orders
- Minimum level. The amount of stock needed to keep you in stock when you are waiting for an order to arrive and is daily sales x delivery time.
This basic system assumes that the past is a guide to the future. It can also become seriously unstuck if stock levels of an item are low, e.g., if there is only one item in stock and this sells on the first day, the system will assume there will be one order every day.
