In supply chain management, managing inventory is crucial, but it isn’t always straightforward. Retail firms must thus maintain consistent SKU-level inventory data.
There are important factors to consider even if you have a solid track record with inventory accuracy. Continue reading to find out more about ways to increase eCommerce inventory accuracy.
What is inventory accuracy?
Inventory accuracy refers to differences between the actual quantity or kind of physical inventory and what is recorded or assumed to be the case. It is usually the discrepancy between what is recorded in an inventory management system and what is available for sale at a store, warehouse, or storage facility.
How to calculate eCommerce inventory accuracy
Physical inventory counting
Inventory reconciliation, or comparing actual inventory counts with inventories recorded, aids in minimizing stock discrepancies and determining their root causes.
You’ll need to physically count all the merchandise you have on hand and compare it to what you should have.
Inventory accuracy rate may be determined using the following formula:
Inventory Accuracy Rate = (Counted Units / Units on Record) x 100
This technique of assessing inventory consistency is an inventory accounting approach that involves counting the value of the inventory you have on hand (physical inventory) and dividing it by the value of the list you should have in whichever system you use to manage inventory data.
Because you are not comparing each item in your inventory, this technique is less precise. If your inventory accuracy is low, review your sales receipts and records.
Tips to Ensuring Inventory Accuracy for Your eCommerce Store
Count your inventories regularly
eCommerce inventory accuracy is an important factor to consider. Inventory should be verified periodically to ensure the physical list matches the records.
By doing this frequently, you may reduce the likelihood that your inventory is wrong. Additionally, if your inventory is wrong for whatever reason, you’ll be able to correct the problem right away.
Implement the cycle count program
Cycle counting is a manner of managing inventory where a part of the inventory is measured in certain locations, on certain days, and on a regular schedule. Adopting a cycle count program allows you to skip annual physical counts and instead count particular goods on a more regular basis, ensuring your inventory is correct.
Increase inventory security
Proper inventory security assures the safety of your items while they are in storage. You can reduce theft by making sure your merchandise is safe. As a consequence, your inventory counts will stay accurate because theft is not a factor.
Use more professional storage techniques
Instead of self-storing your goods, consider having it professionally stored in a suitable warehouse. It is all too simple to misplace stuff in your apartment, cellar, garage, or vehicle.
Although this type of investment may result in higher overhead expenses, you may wind up saving money in the long term due to increased eCommerce inventory accuracy.
Collaborate with a fulfillment partner
Rather than maintaining your own inventory, you may collaborate with an eCommerce fulfillment partner who will store and manage your goods in their warehouse(s). Picking, packing, kitting, shipping, inventory management, and warehousing are all services provided by fulfillment firms.
BackOrder, for example, may give inventory forecasting tools as well as access to data and distribution metrics that measure inventory stability.
Improving inventory accuracy and optimizing inventory management is critical, but it may also be challenging and time-consuming. Thankfully, you may outsource all this to a competent third-party logistics service. Contact us today to find the best solution for your eCommerce inventory accuracy!