Original post from SellerHub.TV — https://sellerhub.tv/basics-of-inventory-management/

Inventory management, stock control, order processing… exciting right?

So I know this will not set the hearts racing of the growing entrepreneur, and let’s be honest, this is not a traffic magnet topic for Google, so why talk about it?

Because it is SUCH an IMPORTANT factor for any online business and the sooner you get it right the quicker you will grow.

This is our second episode of the “Starting Ecommerce” series and we’ll go through some of the basics of inventory management and why they are important as you grow your business.

What’s in this episode?

• SKUs what they are & why they’re important
• Product identifiers and item specifics
• Picking locations
• Self-fulfilled vs 3rd party fulfilment
• Stock control

SKU

So what is a SKU? SKU stands for Stock Keeping Unit but to you and me, it is a unique ID for that item. (Think James Bond and 007)

I have seen many people use their suppliers code, item barcodes or even worse, letting Amazon pre-generate a SKU for them.

It may not seem important at first but as you expand your sales through multiple channels you will need to link these to your inventory. The SKU is this link.

Your SKUs should be unique to your company and follow a format that makes logical sense to your business.

Example: AC-CS-140

I have a range of items from Acme Co, they supply me with Card Sleeves in many different designs. From the SKU above I can tell the manufacturer of the product, what category it belongs too and the allocated item number for that product. AC-CS-140 (Supplier-Category-Item Number).

If your items have different colours, sizes and styles you will want to consider diversifying your SKU layout to accommodate these attributes.

Example: AC-MS-XL-R

Using the example above we can tell by the SKU that we have an extra large, red men’s shirt from Acme Co (Supplier-Category-Size-Colour).

However you decide to write your SKUs, there are some good practices to take note of:

• Keep it uniform — keep the SKU structures and lengths the same
• Start with a letter — Spreadsheet software is notorious for removing 0’s and re-formating numbers
• Don’t rely on the SKU for picking — this is what picking locations are for

Product identifiers and item specifics

GTINS, ASINS, EANs, MPNs are just some of the terms you will here as you start selling online. In recent years both product identifiers and item specifics have become such a large part of ecommerce. Though it may seem a little daunting, I have written an explanation of what they are and why you need to use them.

GTIN — Barcodes

A GTIN is basically a product barcode and can come in a variety of styles, here are some of the popular ones you will come across:

• EAN: European Barcode
• UPC: American Barcode
• ISBN: Barcode for books

Other identifiers

There are also some other identifiers that popular marketplaces use:

• ASIN: Amazon’s own internal product identifier
• MPN or Mfr Part Number: This is the manufacturers part number

Typically when listing new items, you will need to provide a barcode and the MPN.

Item specifics

So what do we mean by item specifics? These are the details and attributes of the product, and depending on what product you are selling they can vary accordingly.

For example, in clothing you will have:

• Size
• Colour
• Material
• Gender

If you are selling Toys then you have certain specifics such as:

• Recommended age
• Batteries required
• Brand

Items specifics are not just important for the consumer but they are crucial parts in the major marketplaces search engines and filtering. They also play an important part in both SEO for Google and a core part of your Google Shopping Feed.

As voice search becomes more mainstream with the introduction of Alexa, Siri and Google Home, items specifics will be a uniform way of the consumer filtering their options when interacting via voice.

Picking locations

Most starts up will be running their businesses from a spare room or a garage. If that sounds like you then you probably have a mental map in your head of where every product is located.

Power to you but when you begin to expand, move to a new premises and hire staff, do you really want to be asked on every order where a product is?

Picking locations allow you to optimise the way you pick orders by taking the knowledge out of your head and putting it in front of the person picking the order.

To get the most out of pick locations, you will not want to pick orders individually but rather in batches. By using pick lists this stops the need to going back and forth to the same place in the warehouse multiple times.

Reducing the number of steps in your warehouse is key, once you have accumulated enough orders you will have the data to see what your popular products are, organise your warehouse and move these products close to your packing station.

Some Top Tips

• Keep picking locations simple
• Move fast moving lines close to packing area
• Print pick lists sorted by Pick Location

Margin is key in ecommerce and this is the one area where you have the majority of control to optimise and reduce costs by simply inputting processes.

Self-fulfilled vs 3rd party fulfilment

When it comes to fulfilment in Ecommerce the world is your oyster, buy oyster can be expensive. There are several routes you can take to fulfilling orders.

The first one is that you can fulfil your orders from your premises, another popular option is to outsource the fulfilment to a specialist 3rd party company that will hold your stock and ship your items for a charge.

There is even the opportunity to dropship your orders directly from your supplier or if you sell on Amazon you can use Amazon’s own fulfilment service called FBA (fulfilment by Amazon).

Self-fulfilled or Merchant fulfilled

Self-fulfilled fulfilment is where you store the products, pick the products, pack the order and choose which courier they go with.

Pros: You have complete control of the order lifecycle, from the order coming in, to how it’s packed, to which courier it is shipped with.

You have the opportunity to implement processes to drive down costs and increase the overall efficiency.

Cons: Overheads of having a physical location and the fact that you usually have to purchase stock before you can sell it.

3rd party fulfilment centres

3rd party fulfilment centres are businesses that have been set up to dispatch other companies orders. You send the 3rd party fulfilment centre your products and they take care of the whole warehouse process, from storing to shipping.

Pros: You don’t need to pick, pack or ship the order. You don’t need to worry about hiring warehouse staff or even getting a warehouse.

Cons: You will be charged for the storage of your products, packing of the orders and the cost of shipping. You also have limited control in that process.

Dropshipping

Dropshipping is where you list/advertise your suppliers products, when you make a sale you send your orders to your supplier who will deliver it directly to your customers.

Pros: Only pay for the stock you have sold, no need for large overheads.

Cons: Margins are tighter, competition is higher and you have to trust your supplier with your reputation.

FBA

FBA is fulfilment by Amazon, in a nutshell it is a 3rd party fulfilment centre but with added extras.

Pros: If you are selling on Amazon, then your products will be Prime eligible. It has also been known to help you win the buy box on listings.

Cons: Amazon charges for this service and some sellers don’t feel too comfortable having Amazon control of their stock. (Remember Amazon is also a retailer as well as a marketplace.)

Extra Bonus Point: If you are using FBA you can use it not just to fulfil your Amazon orders but also orders from eBay and your Website. Don’t believe me? Read More Here

Stock control

Trust me, when you start selling online, you really don’t want to oversell. It is so important to keep your stock levels up to date.

Some of you may only be selling on one channel, maybe your website or a marketplace like Amazon or eBay. But even if you are just selling on one channel right now you will have events that will affect the stock levels outside of the channels domain.

Think about it, do you believe you will never ever get a return? or give out a sample? or perhaps to open a box to find several faulty products… So even if you are starting out on one platform, having somewhere you can store your stock levels is crucial.

So to start off with create yourself a spreadsheet or even look at software to do this with (I can recommend some here). But essentially make sure you keep your stock records up to date and run regular mini stock takes.

Questions

I hope you have found this episode insightful, exciting, no, important yes! I’ve worked with so many established online businesses and honestly, this is such a common paint point when growing. By tackling it early on will ultimately save you time, stress and money on admin tidy up your data.

So if you are a new online seller and have any questions or need advice, please comment below. If your an established seller feeling the pain, let us know. Good luck!

Goal Setting

Ecommerce sellers can often experience significant growth in the early stages of business development. Scaling an online selling business can become quite a roller coaster ride and whilst new challenges seem to pop up on a daily basis it’s often easier to find and throw quick fixes at problems as a temporary solution. When you come to do a proper audit of your business you’ll soon find yourself relying on a range of ill-suited systems and processes. The issue is that as your business grows in size and complexity these processes become unfit for the job in hand. It is important to set your goals as a business as early on as possible, once you have defined what you’re setting out to do, you can then start to build smart systems and procedures using data and metrics to keep you on the right path. Most online businesses share the same key goal: increase revenue, but it’s also important to ensure that whilst revenue increases you are also maintaining good margins and are investing in scalable systems that support future growth. Put simply, you want your goals to look something like this:

• Increase Revenue
• Increase Margins
• Improve Efficiency

Increase Revenue

There are many ways you can increase revenue, for a lot of online sellers the solution is to list a product multiple times on multiple marketplaces. While this is a tried and tested model, there are additional ways for increasing revenue by using the metrics and data that you have on hand.

Monthly Sales

• You need to have this metric in place to be able to set sales targets, spot trends and analyse your sales in general.
• A great tip is to break down the bottom 20% of your moving lines, see where you can improve their sales, or exchange poor selling lines with new potential lines.

Average Order Value

• Knowing how much a typical customer spends with you is a great benchmark for creating a sales strategy. Your goal will be to increase this number.
• By using your sales data you can see product relationships and what sells well together, use this to create kit/bundle listings on popular marketplaces or alternatively, use an upsell feature on your website.

Shipping Upgrade

• How many of your customers pay for an upgraded shipping service, could you upsell this service and make it profitable?

Increase Margins

This is an area that a lot of SME’s struggle on, you can be great at getting good prices on packaging, software and overheads but there are other areas you should be monitoring to ensure your processes are optimised for the best margins.

Cost Per Pick & Pack

• How much manpower does it cost you to pick and pack an order?
• Are your warehouse team having to travel across the same area of the warehouse multiple times?
• Are you using picking locations?
• Ideally you want to optimize this process so that your popular moving lines are close to your packing station.

Average Advertising Cost Per Order

• How much are you spending on advertising/boosting your listings?
• Are you optimising adverts that aren’t doing so well?
• Are you increasing budget into adverts that convert well?
• Your aim here is to lower the average cost down by improving your overall conversion.

Improve Efficiency

Increasing your margins and the number of sales will allow you expand, hire more staff, invest in software and grow your business. But before you go for that next hire, ask yourself, could your current systems/team be improved?

Return Rates

• With 23% of returns being down to the customer receiving the wrong items, this is a massive area in which you can reduce your customer service cost. By recording the percentage of returns and exchanges you will able to set goals and investigate their causes. Analysing the data is key to making improvements.

Average Order Processed Per Picker/Packer

• This will depend on your warehouse setup and is very similar to Cost Per Pick & Pack metric. By seeing how many orders each individual can dispatch down to the hour, you can set realistic targets and investigate how you can optimise your warehouse process.

Average Customer Service Resolution Time

• How long is your customer service team spending on solving issues?
• Are there some common recurring queries like an invoice request?
• This metric will allow you to set a goal and dive down further into optimising your customer service team, reducing their workload, improving processes and automating common tasks.

A final note on KPIs

There are a number of KPI’s you could put into place and each business will be different, but if you take one thing away from this article then please let it be this… Setting goals with measurable KPI’s will give you the valuable insights needed to grow your business in the most efficient ways possible, saving you both time and money and giving the added competitive advantage that all online sellers strive for.

I hope you found this article useful and I would love to hear from you on LinkedIn or Twitter.

Charlie McBroom — Ecommerce Expert

Co-Founder of Fitted Commerce — Presenter at SellerHub.TV

Originally published at www.currenciesdirect.com.

The IRX is probably the “Ecommerce event” of the UK and like every year it just gets better. This year was no different with amazing suppliers and innovations being presented to the ecommerce industry.

In our video, we highlight just a few of the companies exhibiting there. We’ve written a short breakdown of who they are, what they do and even included a link to their site.

Featured Suppliers

Shopware — Shopware had one of the centrepiece displays at the expo and this was only to match the quality of their platform. Shopware is an ecommerce platform that is open source. Unlike other open source platforms such as Magento, Shopware really focuses on usability, design and the shopping experience.

EiraTech — Warehouse picking robots! Yes, that is right but you’re probably thinking “This is out of our league, this cost Amazon millions to implement” etc… Well, guess what, these machines are targeted at the SME market. It is a modular system and rather than investing a large sum up front, you pay for the system in a RaaS model (Resource as a service). With being able to do 600 picks per hour, I can see a lot of SME’s considering this.

Linnworks — Linnworks is a multichannel ecommerce system which links all your selling channels and couriers into one place. It updates stock levels, prints out shipping labels, sends out dispatch emails and even bulk lists your products.
Other than having over 4000 businesses using their software, they have now got an app store allowing Linnworks to be highly customisable.

Automated Packaging Systems — More machines and this was no disappointment. The machine Automated Packaging Systems demonstrated didn’t just automate to opening and sealing of a packaging bag, but, it printed a shipping label directly on the bag itself. The packing rate is anywhere from 250 to 400 an hour!

Currencies Direct — When it comes to currency conversion there are few that have the expertise Currencies Direct have. Many Amazon sellers still let Amazon convert and send their foreign currency into their own bank account. One of the services Currency Direct offers is international collection accounts in the country of that currency which gives you the flexibility of when to take the currency out and also is at a far lower rate to convert than what Amazon offers.

EasyPack — EasyPack offer a variety of green packing systems ideal for online sellers. The one demonstrated in the video shows a roll of packing paper being form and cut into a size inputted on their machine. This saves you having to buy different styles of packing fillers which take up storage. Plus, all of their paper is 100% recycled!

Volo Commerce — Volo Commerce is an eCommerce ERP system. It connects with your selling channels and couriers to create a warehouse management and inventory system. Volo Commerce is focused on growth and as well as their software they offer a customer success manager to help you expand your business.

PeopleVox — PeopleVox is a WMS (Warehouse Management System) that is focuses around ecommerce. Their system allows SME’s to make their warehouse process as efficient as possible, giving them the edge to compete with larger retailers. With a tonne of integrations and flexibility, PeopleVox offers a great solution and are passionate about fulfilment.

XSellco — XSellco offers a variety of tools, including their feedback generation solution and repricer. The tool that stands out for me is Fusion, their CRM system for ecommerce. With so many integrations including eBay and Amazon, Fusion allows you to automate repsonces, translate and also gives you details in regards to the status of the SLA to that customer query.

Originally published at sellerhub.tv on April 6, 2017.

This article on Medium has been pulled from our video series “Starting Ecommerce”. Feel free to jump to the site and watch the video but in a nutshell we are going to discuss some of the basics of inventory management and why they are important as you grow your business.

What’s in this episode?

• SKUs what they are & why they’re important
• Product identifiers and item specifics
• Picking locations
• Self-fulfilled vs 3rd party fulfilment
• Stock control

SKU

So what is a SKU? SKU stands for Stock Keeping Unit but to you and me, it is a unique ID for that item. (Think James Bond and 007)

I’ve come across many young businesses populating SKU fields with their supplier's code, item barcodes or even worse, letting Amazon pre-generate one!

At first, this may seem like it doesn’t matter but as you grow and expand into many different channels you will need to link all your listings together to your inventory… or you will oversell, undersell and really have no idea what is in stock.

A SKU should be unique to your company and follows a format that makes sense to your business.

Example: AC-CS-140

Above is an example SKU and System we are going to use.
I have a range of items from Acme Co, they supply me with Card Sleeves in many different designs, colours etc...

From the SKU above I can tell which manufacturer, what category of item it is and then an allocated number for that product. AC-CS-140 (Supplier-Category-Item Number).

If your items have different colours and sizes then you may want to diverse your SKU layout slightly.

Example: AC-MS-XL-R

Here we have an extra large, red men’s shirt from Acme Co (Supplier-Category-Size-Colour).

However you decide to write your SKUs, there are some good practices to take note of:

• Keep it uniform — keep the SKU structures and lengths the same
• Start with a letter — Spreadsheet software is notorious for removing 0’s and re-formating numbers
• Don’t rely on the SKU for picking — this is what picking locations are for

For more clarification, it would be worth watching the video: https://www.youtube.com/watch?v=fEeKOPANrGY

Product identifiers and item specifics

GTINS, ASINS, EANs, MPNs are just some of the terms you will hear as you start selling online. In recent years both product identifiers and item specifics have become such a large part of ecommerce. Though it may seem a little daunting, I have written an explanation of what they are and why they are important.

GTIN — Barcodes

A GTIN is basically a product barcode and can come in a variety of styles, here are some of the popular ones you will come across:

• EAN: European Barcode
• UPC: American Barcode
• ISBN: Barcode for books

Other identifiers

There are also some other identifiers that popular marketplaces use:

• ASIN: Amazon’s own internal product identifier
• MPN or Mfr Part Number: This is the manufacturers part number

Typically when listing new items, you will need to provide a barcode and the MPN.

Item specifics

So what do we mean by item specifics? These are the details and attributes of the product and will vary depending on the category you are selling.

For example, in clothing you will have:

• Size
• Colour
• Material
• Gender

If you are selling Toys then you have certain specifics such as:

• Recommended age
• Batteries required
• Brand

Items specifics are important and not just for the consumer, but they are an important part of the marketplaces search functionality and rankings. They also play a big part in Google and Google Shopping.

As voice search and personal assistants such as Siri, Amazon Alexa and Google Home become more mainstream, item specifics will play an even bigger role in the way consumers search for products.

Picking locations

When you start out, you may be running your business from a spare room or your garage. You probably know where to locate your products.

But, when you begin to expand, move to new premises or hire staff, picking locations take that knowledge out of your head and allow others to pick orders efficiently. I mean you really don’t want someone asking you every 5 minutes where a product is right?

Printing a pick sheet detailing the location of items to pick is a good way to make the most of your time.

The idea is to do mass picks for batches of your orders rather than pick one by one saving you visiting the same part of your warehouse multiple times.

As you sell more, you will see trends and identify popular sellers and fast moving SKUs. Use this data to organise your warehouse so the popular products are closer to your packing area.

Some Top Tips

• Keep picking locations simple
• Move fast-moving lines close to the packing area
• Print pick lists sorted by Pick Location

Look margins are key, so one of the main aims, as you grow, is to keep your Pick/Pack cost as low as possible. This is one of the areas of cost in your business that your own internal processes can have an impact on.

Self-fulfilled vs 3rd party fulfilment

When it comes to fulfilment in Ecommerce, the worlds your oyster (and like oysters, some routes can be expensive).

One option is to dispatch your orders from your premises, another is to outsource that to a specialist 3rd party company that will hold your stock and ship your items for a charge or you could not hold any stock and dropship from your supplier.

If you are selling on Amazon then you can use Amazon’s own fulfilment service called FBA (fulfilment by Amazon).

Self-fulfilled or Merchant fulfilled

Self-fulfilled fulfilment is where you store the products, pick the products, pack the orders and choose which courier to send them with.

Pros: You have complete control of the order lifecycle, from the order coming in, to how it’s packed, and how it should be sent. This includes having control over the processes and input into their overall efficiency.

Cons: Overheads of having a physical location and the fact that you usually have to order the stock before you get to sell it. (Unless you use Just In Time or J.I.T)

3rd party fulfilment centres

3rd party fulfilment centres are businesses which have been set up to dispatch other companies orders. The general concept is that you send them your stock and they take care of the whole warehouse and dispatch process.

Pros: You don’t need to pick, pack or ship the order. You don’t need to worry about hiring warehouse team or even getting a warehouse.

Cons: They will charge you for storing the products, picking products, packing orders and the cost of shipping. You also have limited control in that process.

Dropshipping

Dropshipping is where you list/advertise your supplier's products and as you get orders you send the shipping information to the supplier who will then ship directly to your customers.

Pros: Only pay for the stock you have sold, no need for large overheads.

Cons: Margins are tighter, competition is higher and you have to trust your supplier with your reputation.

FBA

FBA is fulfilment by Amazon, in a nutshell, it is a 3rd party fulfilment centre but with added extras.

Pros: If you are selling on Amazon, then your products will be Prime eligible. It has also been known to help you win the buy box on listings.

Cons: Amazon charges for this service and some sellers don’t feel too comfortable having Amazon in control of their stock. (Remember Amazon is also a retailer as well as a marketplace.

Extra Bonus Point: Most people still don’t know that you can send your eBay and website orders directly to Amazon, yes that’s right, you can send orders that are not from Amazon to FBA. Read More Here

Stock control

When you start selling online, you want to make sure that you don’t oversell. It is important to keep up to date with what you have in stock.

Even if you are only selling on one marketplace initially, it is a good idea to get into the practice of keeping your stock updated. Giving out “freebies”/samples, receiving returns or finding damaged products are all occurrences of stock changes that you would have to update the channels you sell on.

So create yourself a spreadsheet or even look at software to do this with. (I can recommend a few)

But whatever you do, make sure you keep your stock records up to date and run regular mini stock takes. To make life easier, break it down into categories or locations in your warehouse.

Questions

I hope you’ve found this episode insightful, it is far from the most exciting part of ecommerce but its the area which can cost you a lot if you don’t get it right early on and I have worked with A LOT of established businesses which have paid me a fair amount to help them fix it.

So if you are a new online seller and have any questions about the above/need advice, please comment below. If you’re an existing online business and have this issue, let me know!

Good luck with your online adventures!

Originally published at sellerhub.tv on March 28, 2017.

Before I break the internet and explain why I am optimistic about theses changes, let’s go over them in some brief points:

Removal of 3rd Party Ads
So eBay will be getting rid of 3rd Party Ads and will be replacing them with only eBay Promoted Listings.

Free Promoted Listings Credit
Sellers will be receiving promoted listing credit/listing upgrade credit, if you’re in the US then it will be every quarter ($30) and for the UK on a monthly basis (upto £20 monthly depending on your store type).

The Best Special Offers on Mobile Search Results
The best special offers from sellers will be promoted at the top on eBay’s mobile search results.

Shipping Supplies Coupons For Anchor Stores
The amount that you get for eBay branded shipping supplies is increasing, in the US from $75 to $150 per quarter for Anchor Stores, in the UK from £10 to £20 a month for Anchor Stores.

Store Subscribers Fees Are Increasing
Store fees are increasing in both the UK and US eBay though they are including new ways to sell and increasing the amount of free fixed listings.

Top Rated Seller Discounts Are Decreasing
Well this has only been confirmed on the US site, but the Top Rated Seller discounts are dropping from 20% to 10%. Once I confirm for UK sellers, I will comment below.

Tracking Requirement To Qualify for Top Rated Seller
This again is US only, but for UK sellers it is good to keep an eye on this as it is plausible this could come into effect in the UK at one point.
The tracking requirement to qualify for top rated seller will increase in the US from 90% to 95% on June 20th.

So in a nutshell, you are going to be paying more and there is no way of sweetening that but, listen.

What eBay is doing is a good thing.

Now many of you are probably thinking I am a right so and so or have even just left this page but, here is why I feel this is the “beginning” of eBay being great again.

It is very clear for most multichannel/omni-channel sellers that Amazon is king.

The reason is due to being truly focused on their marketplace, the seller experience and making money.

eBay still has a lot of cultural swing-backs from the early days of 2001, these early day ecommerce attitudes that still linger in eBay have been obliterated from the mindset of the modern buyer by Amazon.

By eBay investing in a bigger vision of itself, focusing on generating more sales directly from its site shows that eBay is taking a major step to compete with Amazon.

As an omni-channel ecommerce consultant we help a variety of businesses from managing early startups, implementing systems & strategies for SME’s and consulting for larger enterprises.

It is in my interest and all my clients (and yours) that Amazon has at least one strong competitor that will allow both marketplaces to constantly grow, to offer a better shopping experience for buyers, and a more prosperous platform for sellers.

Let me know your thoughts and opinions, I would love to hear them!

Here are some useful links for further reading too.

eBay UK Spring Update 2017

eBay US Spring Update 2017

To make sure people can find your Pins, you will need to make sure your Search Privacy settings are marked as No.
This can done in your Business Account Basics screen.

Well there are many ways to increase your following; from making sure your website has a Pinterest Follow button to being very active on the platform.

Like all Social Channels, it relies on great content, being interactive and sharing others content too.

A great article for some good tips can be found on the Linnworks Blog Here.

When you create a pin, you really need to think about what you are trying to achieve.

If you are just promoting a single product, then perhaps an image of the product on Pinterest leading directly to the product page on your website would be ideal.

But what we typically find that works well are great Lifestyle images!
This could be in a form of an idividual product of the range or a setting highlighting multiple products.

These pins would take you to a dedicated landing page of a range of products. Typically the landing page is presented with more lifestyle shots and includes a selection of products related to them with clear call to actions. (buy buttons)

This is a great idea for those who just simply don’t have time to manage another social media platform, affiliate marketing allows others to promote your products on Pinterest. This is typically done on a commission basis and sales can be tracked by the use of special links.

Using Rich Pins

Whilst Buyable Pins are only for the U.S. at the moment, there are other types of Pins for the more advance Pinterest users to take advantage of.
One is the Product Pin which allows Pinners to see information about things you sell, including pricing, availability and your location.
Read Pinterest’s developer guide for more information.

Originally published at www.fittedcommerce.com on November 13, 2016.