Demand Planning for Your eCommerce Business

As the online retail market continues to grow, successful eCommerce businesses know that increased demand can present both thrilling opportunities and daunting challenges. Demand planning is an important business practice for any organization looking to accurately anticipate customer needs, maximize fulfillment cost savings, and drive growth efficiently.  In this blog post, we’ll explain just what eCommerce demand planning is and how your online business can utilize it to its advantage. Read on to learn more about incorporating demand forecasting into your strategy! What is Demand Planning? Demand planning is the practice of estimating consumer product demand to make sure there is enough inventory to fulfill demand. Reducing excess inventory and preventing supply chain interruptions entails using cross-functional procedures like supply chain management and inventory management.  It seeks to balance keeping enough inventory on hand to fulfill customer demand without stocking up too much. When this is accomplished, your firm will see increases in efficiency, profitability, and customer happiness. Best Practices for eCommerce Demand Planning Utilize the Proper Software One may utilize various tools to estimate demand for their eCommerce firm. Although picking the best one might be challenging, it’s crucial to ensure that the devices can manage the numerous demands of demand forecasting. You must consider the provider’s standing, transparency, reporting skills, and prediction accuracy. Gather Data and Prepare It Real-time data has a substantial influence on your eCommerce demand planning. Obtaining inventory movement metrics data aids in identifying areas that require action or improvement. Data mining and aggregation are done on time can assist you in developing a more responsive process model. Get Other People Involved Demand forecasting and planning necessitate communication and collaboration with diverse stakeholders at each process stage. Key participants include suppliers, finance, operations, sales & marketing, demand planners, and other departments involved. Create Process Models To minimize misunderstanding during the process, your eCommerce demand planning strategy must follow a specified cycle. If the procedures and information are clearly defined, it will be easier to hold everybody accountable, resulting in underperformance. These are the steps of a well-planned demand process: Have Well-Defined Roles Supply chains are complicated since many individuals collaborate, and some may go lost in the process. To ensure understanding if participants do not entirely grasp what is expected, each participant in the process must have real-time visibility and clearly defined roles. Prepare to Take Advantage of New Opportunities A good demand strategy should not only forecast customer wants but also identify risks and possibilities for development. A rise in demand for a specific product may indicate that you need to boost your production capacity ahead of time by adding or transferring workers. In Conclusion When a product is not available for purchase by clients, your company loses revenues and, eventually, customers. Our application BackOrder can solve out-of-stock situations and rescue lost revenue for e-commerce businesses. Excess unused inventory, on the other hand, takes up space and raises production costs unnecessarily. Demand planning enables company executives to keep ahead of market trends and make proactive choices while still meeting the demands of their consumers. Contact us today to go successful with eCommerce demand planning!

Forecasting Your eCommerce Inventory for Better Planning

Managing eCommerce inventory requires persistent forecasting and analysis to ensure you have enough items in your store to fulfill customer demand. Without adequate planning, operations can become chaotic — leading to disappointed customers, out-of-stock products, and revenue losses.  In this blog post, we will explore the strategies for improving your eCommerce inventory forecasting process with better planning methods that lead to better decision-making. What is eCommerce inventory forecasting? Inventory forecasting projects the quantity of stock you’ll need for each SKU in the coming month, quarter, or year based on historical data, seasonal trends, industry trends, and estimates of future demand.  To stay up with the speed of modern eCommerce, it’s critical to leverage the inventory forecasting capabilities integrated into your inventory management software, so your projections are based on data rather than guesswork. Benefits of accurate eCommerce inventory forecasting Customer Demand Prediction and Fulfillment To keep your customers satisfied, you must have the things they require in stock when they place their purchases. Inventory forecasting allows you to plan for client demand and avoid losing sales to competitors or making consumers wait for backorders. Utilize Inventory Management to Increase Cash Flow Although the pandemic ended just-in-time inventories, reverting to a just-in-case strategy might restrict your business progress. Accumulating too much cash might limit your promotional budget, reducing your capacity to attract new clients.  Furthermore, you may wind up with deadstock. Deadstock is merchandise on the shelf for so long that it has gone out of style and is no longer sellable. Improved Supply Chain Management When you can precisely estimate client demand, you can optimize your supply chain to the ideal Goldilocks state: neither too much nor too little inventory. Inventory forecasting, in conjunction with a precise grasp of your production lead time, enables you to minimize rush charges and strengthen your working relationships with your suppliers. Inventory forecasting methods Quantitative forecasting Using your past sales data, quantitative eCommerce inventory forecasting makes predictions about future sales. You can frequently build a more complete picture if you have access to several years’ worth of historical data. However, you should base your data analysis on a meaningful time frame.  For instance, data from six years ago might not be accurate for demand forecasting if the sales velocity of a particular SKU changed significantly owing to changes in consumer buying behaviors two years ago. Qualitative forecasting Using external data sources like market-impacting political events, inflation, trade treaty changes, and economic trends, qualitative inventory forecasting makes predictions about consumer demand. Trend forecasting To map changes in product demand and customer behavior, trend forecasting gives insight into your sales data and patterns in your product category. And, to estimate future demand, a trend forecast may project purchasing tendencies for specific client profiles.  Trend projections use past sales data to analyze variations in sales velocity over extended periods as opposed to seasonal demand fluctuations. Seasonal forecasting Demand forecasting is done using seasonal inventory data together with information on upcoming events. The timing of essential sales seasons, such as the weeks between Thanksgiving and Christmas, approaching holidays, and weather conditions, can all influence seasonal forecasting. Graphical forecasting Although it is sometimes treated separately, visual inventory forecasting is more of a technique for displaying temporal quantitative data and other information obtained through laborious data collecting. Forecasts of trends may be best represented graphically with line graphs or other visualizations. In Conclusion, With accurate data on past sales patterns and future predictions of product demand, businesses can make well-informed decisions about their purchases and shipments to maintain a healthy inventory level. And to have more tools and methods to implement successful eCommerce inventory forecasting, contact us today!

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