Improving Your eCommerce Inventory Turnover


Finding ways to optimize your eCommerce inventory turnover is key for any online business looking to increase profitability and ensure customers get the products they need on time. In this blog post, we’ll discuss how you can maximize success on tightening your inventory control processes while keeping customer satisfaction high.

What Is Inventory Turnover?

The pace at which a company’s inventory is sold and then restocked is referred to as inventory turnover. For example, an inventory turnover ratio of 2 shows that you sold and restocked twice as much product as you held.

Product companies use the inventory turnover ratio to assess the effectiveness of their supply chain and storage systems, as well as the degree of demand for their items.

Improving Your eCommerce Inventory Turnover

Ways to Increase Your eCommerce Inventory Turnover Ratio

Enhance your customer experience to increase sales

In today’s market, the main brand distinction is customer experience over price and product. Furthermore, research has shown that companies with a better customer experience generate 5.7 times more income than competitors with subpar customer experience ratings. Refining your customer experience is an excellent place to start if you want to boost yearly sales and sell more inventory.

When it comes to improving customer experience, inventory tools like BackOrder and Atom8 are essential. The prior app allows customers to backorder products even when out of stock. At the same time, Atom8 takes care of automating much time-intensive inventory task, such as order notification, data entry to Google Sheets, or shipping workflows.

Utilize just-in-time inventory management

Just in time (JIT) is an inventory management strategy in which products are ordered, stored, assembled, and manufactured at the last feasible minute to fulfill orders. The JIT method aims to get orders to consumers as rapidly as possible while minimizing product holding costs. 

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You do not need safety stock when you adopt the JIT approach, which minimizes the overall inventory in your warehouse at any one moment and results in a higher stock turnover.

Improving Your eCommerce Inventory Turnover

Streamline last-mile deliveries and warehousing

You must ensure that your inventory moves swiftly and effectively from your storage facility to your client, regardless of whether you utilize the JIT inventory management strategy or want to maintain some safety stock on hand. 

When given the option of same-day shipment, just under half (49%) of customers say they are more inclined to make an online purchase. Additionally, if the same-day shipment is not offered, more than a quarter of customers will cancel their online orders.

Consider the seasonality

Around particular holidays, many companies see changes in demand. To maintain a good eCommerce inventory turnover ratio throughout the year, inventory levels can and should change in accordance with your order.

Utilize capacity planning to determine when you’ll need more stock (and more workers to assemble or produce things) and when you can use fewer supplies (and workforce).

Increase revenue by luring more customers

It may seem apparent, but raising demand for your product is a certain method to lower your eCommerce inventory turnover ratio. However, it’s still important to note because it forms the basis of every flourishing enterprise. Additionally, while the idea of “making more sales” is straightforward in theory, doing it in fact is much harder.

Improving Your eCommerce Inventory Turnover

Minimize your chances of product returns

Product returns hurt your revenue as well as your inventory. Although returns and exchanges will never totally disappear for product firms, it doesn’t mean you can’t take steps to reduce how often they happen.

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In Conclusion,

From understanding what drives sales to find the most effective strategies, having knowledge on how to improve your eCommerce inventory turnover can take your online store’s performance and productivity up a few notches.

However, even realizing an issue exists is only half the battle. You need to know how to calculate the inventory turnover rate, but you also need to know how to increase it if you want to use it effectively. Contact us today for more powerful eCommerce solutions.


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