Inventory control in online trading

Your efforts have finally paid off and your webstore is beginning to gain traction, but not only is your customer base growing; your sales numbers and revenue are both steadily in­creas­ing too. If you have a wide range of products and you export your goods manually, the business’ growth could spell disaster for your or­ga­ni­za­tion­al systems, resulting in supply shortages and, ul­ti­mate­ly, dis­sat­is­fied customers.

In order to prevent such scenarios from happening, and to bring structure to your shipment pro­ce­dures, stock control systems (ERP systems) should be put in place. A stock control system (also known as warehouse man­age­ment system) links pur­chas­ing, sales, and stock man­age­ment and then in­te­grates these processes directly into your store software. As an online store operator, you can manage your entire online business centrally and easily gain sales from other platforms, such as Amazon or eBay, thanks to a simple interface.

The term “stock control system” describes a form of business software that enables all data on the inventory to be recorded and processed, as well as the as­so­ci­at­ed processes (pur­chas­ing and sales as well as incoming and outgoing goods). Cor­re­spond­ing programs map all article data according to sales channel (sta­tion­ary trade, webstore, online mar­ket­place) and process them clearly. Their purpose is to optimize the control of the flow of goods, to ac­cel­er­ate business processes, and therefore con­tribute to in­creas­ing sales in the long term.

In addition, a warehouse man­age­ment system also supports other business areas - such as personnel man­age­ment and sched­ul­ing - by sim­pli­fy­ing or even au­tomat­ing certain tasks. A good stock control system also offers ap­pli­ca­tion pro­gram­ming in­ter­faces (API) to external ap­pli­ca­tions such as ac­count­ing programs, invoicing software, and cash register systems as well as to online mar­ket­places such as eBay and Amazon.

A stock control system covers the following everyday tasks:

• Struc­tur­ing purchases: con­trol­ling and analyzing purchases is a vital element of any shipping business. Warehouse man­age­ment systems help you order in a cost and demand-effective way, and also help you manage resources.
   
• Struc­tur­ing sales: the software takes control of managing your personal data, the customers’ data, as well as all other in­for­ma­tion relevant to sales. It also assists in planning and executing temporary, short-term, and seasonal tasks such as advent calendars.
   
• Receiving goods: stock control systems organize the delivery of the stock you’ve ordered. They can help organize the intake of stock and check the contents and the invoice.
   
• Shipping: when a customer places an order, the inventory man­age­ment software processes the task up until the shipping procedure. Generally, shipping is con­trolled via scanner tech­nol­o­gy, so you always have your current inventory at a glance.
   
• Warehouse man­age­ment: stock control systems have a range of useful functions to help with the struc­tur­ing of your warehouse. These include labeling systems for products and functions to fa­cil­i­tate inventory pro­cess­ing. Some systems also help to optimally manage available storage space.

Inventory man­age­ment software can automate the numbered sections with the ap­pro­pri­ate modules e.g. pur­chas­ing modules or shipping modules. These gather the necessary in­for­ma­tion from databases and your chosen software via an interface. This in­for­ma­tion includes the barcode scanner app used in the warehouse, your store solution, and your checkout software. The in­ter­faces use a par­tic­u­lar data exchange format, i.e. XML or CSV, and controls sales in external mar­ket­places.

You’ll often encounter ERP (En­ter­prise Resource Planning) systems in con­junc­tion with stock control systems. These can be used for resource planning, although their range of functions goes sig­nif­i­cant­ly further and includes modules for staff man­age­ment, document man­age­ment, and con­trol­ling, among other things. Many ERP systems also include standard stock man­age­ment modules, making them ideal for use in online trading.

The ad­van­tages of a warehouse man­age­ment system quickly become clear when you consider what an en­ter­prise would be without the ap­pro­pri­ate software:

All work steps - be it pro­cure­ment of goods, invoicing, or sales cal­cu­la­tion - would have to be carried out manually. Pur­chas­ing, sales, repeat orders and stock transfers would have to be la­bo­ri­ous­ly recorded in a warehouse register. With more than a hundred different items, it would be hard to keep an overview: You could only find out the total stock of your goods, if at all, with an inventory. In addition, there would be a high chance that certain products would suddenly no longer be available due to high demand - to the dis­plea­sure of the customer. Con­clu­sion: Above all in e-commerce, handling your goods without software support becomes a time-consuming and cost-intensive affair, which is ac­com­pa­nied by high personnel re­quire­ments and a certain sus­cep­ti­bil­i­ty to errors.

A well-managed stock control system helps you with all the above tasks and saves you time, effort and money. It also reduces the error rate and offers extensive functions and services to improve the economic per­for­mance of your company.

Hundreds or even thousands of items are quickly recorded in a single database and can be retrieved from any work­sta­tion. Real-time sta­tis­tics and reporting give you maximum vis­i­bil­i­ty and overview of your inventory - even if you operate multiple ware­hous­es at different locations. At the touch of a button, you can also obtain detailed in­for­ma­tion of all items. For example, you can find out where a certain item is located, how many are still available, and how high the demand for the product is. Shortages can therefore be quickly traced. And, depending on the scope of functions, the computer-con­trolled warehouse man­age­ment system can arrange repeat orders totally au­to­mat­i­cal­ly.

Which software solution is the right one for your online store depends on various criteria: On the one hand, the industry and business area play an important role. On the other hand, the number of users and the com­pat­i­bil­i­ty with the shop software used must be taken into account, as the latter is usually set up before the stock control system.

Another important selection criterion is the desired range of functions. This usually depends strongly on the re­spec­tive provider and should ideally fit the in­di­vid­ual re­quire­ments of your company. For example, man­u­fac­tur­ing companies need an interface to integrate a graphical planning board. Sales rep­re­sen­ta­tives benefit from mobile solutions that enable them to access the inventory at any time.

In any case, a warehouse man­age­ment system should have the following modules:

• Master data ad­min­is­tra­tion module: The “core” of a stock control system contains the data of all suppliers, articles, storage locations, and employees. After being entered by hand, by scanning, or by means of a CSV file, the data is available for all business processes (purchases, returns to suppliers, bookings to another warehouse, sales, returns from the customer, etc.) in­de­pen­dent of time and place.
   
• Incoming goods module: The same is required, among other things, to quickly transfer the data from an elec­tron­ic delivery note into the system.
   
• Ware­hous­ing module: This module is used to manage several ware­hous­es (e.g. in other branches) and to transfer goods to different storage locations.
   
• Sales module: It contains an interface to the cash register system and (in e-commerce) to the shop system as well as to any online mar­ket­places with which data is exchanged in real time.
   
• Returns module: This module handles the or­ga­ni­za­tion of returns.
   
• Inventory module: The task of this module is to com­plete­ly record the current stock levels at the end of a fiscal year and to compare them with the cal­cu­lat­ed stock levels.'
   
• Con­trol­ling modules: They provide detailed data that is relevant for business decisions, e.g. best and worst seller lists as well as sales sta­tis­tics by article, product group, as­sort­ment area, stores, and employees.
   
• In­ter­faces to ac­count­ing and CRM: External programs can be linked to automate monthly ac­count­ing or manage customer re­la­tion­ships. Keyword: Customer Re­la­tion­ship Man­age­ment.

Last but not least, the estimated budget also plays a part in deciding which systems are suitable for you. Es­pe­cial­ly for younger and small to medium-sized shops, pur­chas­ing an expensive complete solution is often not an option. For a high price, you can buy software with complex functions that you don't really need. For operators of smaller stores, cheaper software with limited func­tion­al­i­ty is usually suf­fi­cient - it also offers numerous ad­van­tages over manual ad­min­is­tra­tion.

In the past, warehouse man­age­ment systems were mainly found in large retail chains, but in recent years, they have also been used more often in small and medium-sized en­ter­pris­es (SMEs). As a result, the range of service providers and software solutions on offer has become more diverse and now covers a con­sid­er­able range: from ERP systems for large budgets to free open source programs. We present five im­pres­sive systems covering all price and feature ranges:

Fishbowl Warehouse is able to integrate with many other desktop solutions such as Quick­Books, meaning users can continue using the ac­count­ing software that they’re familiar with. This solution can also be teamed with up Xero, a web-based ac­count­ing solution for small, medium, and large busi­ness­es: you won’t have to waste time on double data entry since your ac­count­ing and inventory records match up.

The inventory man­age­ment features are very advanced when it comes to the Fishbowl Warehouse solution. These features enable you to manage multiple ware­hous­es, track items using your desired criteria, reorder products au­to­mat­i­cal­ly, as well as generate barcodes. The multi-currency feature means you can record sales from other countries and the software will convert the amount into dollars for more accurate tax records.

Fishbowl offers a 14-day free trial so you can test the product without com­mit­ting to it. A demo is also provided to help you get to know the software a little better. If you decide to purchase it after the trial, it will set you back $4,395.

The system is stored on third-party servers, meaning it can be accessed from anywhere, and works on Mac, Windows, and Linux platforms.

Sortly Pro is a cloud-based inventory man­age­ment solution that caters to small and medium-sized business no matter the industry, and runs on Max, Windows, and Linux. Their business plans comprise Free (for one user), Advanced (for three users), Ultra (for five users), and En­ter­prise (for unlimited users) and monthly prices are $0, $39, $99, and for the En­ter­prise version, you need to per­son­al­ly contact Sortly for pricing.

Sortly Pro For Business is a totally cus­tomiz­able system where you can add multiple photos of each item and its cor­re­spond­ing details, providing you with a more intuitive way to keep on top of your stock even if it’s at multiple locations. Main features include location tracking, activity tracking, inventory man­age­ment, audit trails as well as barcoding.

There’s a free trial so you can see if this stock control system is something for you. Well-known brands that trust Sortly include Hewlett Packard, Honeywell, and Coors.

Odoo is an open-source suite com­pris­ing business ap­pli­ca­tions; sales, CRM, project man­age­ment, man­u­fac­tur­ing, inventory, and ac­count­ing in one. The software is also cus­tomiz­able and can be used by any company, no matter the size. It runs on Mac, Windows, and Linux platforms and each module is in­ter­con­nect­ed so that users can enjoy an in­te­grat­ed ex­pe­ri­ence between the apps.

Odoo’s pricing is a little bit different in that it offers a wide selection of apps and you choose the ones you want for your business. This “build your own” approach means that you won’t be paying for any su­per­flu­ous apps. The inventory app costs $27 and you can choose the type of hosting at no extra cost: cloud hosting, on-premise, or dedicated cloud.

The app’s total trace­abil­i­ty means you can track each item’s move from purchase, to warehouse bin, to sales order. The real-time reports means you’re always kept up-to-date and you can easily share these reports with others. You can schedule a demo to see if Odoo works for you.

Finale Inventory is cloud-based and was created to help small and midsize busi­ness­es with their inventory and supply chain man­age­ment. This warehouse man­age­ment system can also be in­te­grat­ed with selling platforms such as Amazon, Etsy, and eBay so you can manage orders from e-commerce sites. Auto updates are made on the channels within five minutes of any stock change, meaning you don’t have to worry about over­selling. The multi-location support means users can keep an eye on stock levels across multiple ware­hous­es. Stock history reports track purchase orders, stock takes, sales order, as well as stock transfer and any changes that have occurred, so you know how an item is faring.

Well-known busi­ness­es such as Netflix, Manscaped, and Bapmic trust this inventory solution, which was built with flex­i­bil­i­ty and scal­a­bil­i­ty in mind. The four packages are Bronze ($99/month), Silver ($275/month), Gold ($449/month), and Platinum ($649/month). The smallest package has the capacity for 1,000 orders a month. This amount increases depending on the package, with Platinum boasting 20,000 orders per month. A free 14-day trial is available to try out the different packages.

Training sessions are also offered, which consist of 60-90 minutes on the phone with real-time screen sharing.

This inventory man­age­ment solution offers warehouse man­age­ment, inventory man­age­ment, point-of-sale, and reporting func­tion­al­i­ty, and can be cloud-based or on-site. The cus­tomiz­able reporting and dash­boards for tracking and mon­i­tor­ing inventory data enable users to gain a full view of all the warehouse and shipping ac­tiv­i­ties so you can make better inventory and stock level decisions when you can see the whole picture. The e-commerce in­te­gra­tion allows user to show the correct price of items depending on the stock’s real-time landing price. It’s most suited to small and midsized busi­ness­es and can be used on Mac, Windows, and Linux.

The award-winning Cin7 is able to connect to over 100 apps, enabling you to unify your business system and save time by not having to re-enter data. Cin7’s packages start from $299 per month and are suitable for busi­ness­es just getting started, to advanced software for well-es­tab­lished en­ter­pris­es. You can request a quote for the features that suit your business the most. The free trial gives you a taste of what’s to come.

The perfect mer­chan­dise man­age­ment system does not exist. The software must fit your re­quire­ments. The following table allows you to quickly assess which software might be right for you.

Only by op­ti­miz­ing your structure and au­tomat­ing shipping and trans­ac­tion pro­ce­dures can a growing webstore yield a long-term profit. It’s therefore im­per­a­tive for the success of a webstore that pro­ce­dures such as orders, purchases, sales, and warehouse man­age­ment are automated as soon as possible, which can be done with the help of a warehouse man­age­ment system. Using an ap­pro­pri­ate mer­chan­dise man­age­ment program ensures that you save time and money, which can both be invested in other areas such as marketing or ad­ver­tis­ing.