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Reduce Ecommerce Inventory Costs by Streamlining Processes

Last Updated on Sep 3, 2013 by Jenna Scaglione

cartRunning an Ecommerce business is complex and confusing, and one of the largest components to consider is inventory.

Inventory is a heavy hitter, filled with several dynamics, all of which can either drain your profits OR add to your bottom line.

If your profits are not as high as desired, before you sacrifice product quality or start slashing prices, consider taking a closer look at your inventory process.

Optimizing your processes can save time and money, freeing up your resources to focus on creativity and expansion, the components that will grow your Ecommerce store. Without a close eye on your inventory, your process can get “out of hand” gobbling up inventory costs and stealing your competitive advantage.

Here are some strategies to help you reduce inventory costs:


Streamlining inventory is more than just creating plans and making a few phone calls. It involves maximizing time to increase efficiency at all parts of the system. The topic is beyond the limits of this article, but I listed the major things to consider…

Monitor vendor communications

Is all communication necessary? Not always. It’s not uncommon for Ecommerce establishments to “overcommunicate” in an attempt to keep processes clean; however, if not streamlined, it can eat up resources quickly.

Inefficiency leads to miscommunication, order discrepancies, mistakes, confusion, etc. which over time increase inventory costs.  How much time do you spend communicating with vendors?  Use purchase orders (PO) and monitor how orders are placed to reduce this time.

Specialized tasks

In some cases, reducing the number of employees taking orders on the front end and keeping each working in specialized roles can reduce errors and confusion. For example, dedicate one to two people to manage vendor communication or product inventory management so each person becomes specialized, efficient and an expert in their craft. Also, if problems arise, you will have a better idea of the source, which will make the issues easy to solve and streamline.

The Ordering Process

The more time you spend on the phone with customers, the higher your inventory costs. Time is money. Devise an efficient process for order taking and execute it across your customer service team. Discuss scenarios like what to do should the customer be a “talker” and want to keep the service rep on the phone. List targeted questions that allow the customer to give quick, straight answers without room for error. Whether you are the sole service professional or you manage a team, consistency is key to reducing costs.

The inventory management process is complex and if left untreated, could lead to a store’s early demise. Streamlining your inventory management is crucial to keeping your costs down. The above tips are simply a guide to get you started. Your inventory process will be unique to your store and should be closely connected to your company’s goals.

Need a little help? If your products include variations, streamline your inventory management with the popular Numinix Product Variants Inventory Manager module!

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