An omni-channel retailer with a fairly new, but well-established niche t-shirt business currently has an inventory of ten size large red t-shirts in her warehouse. All ten are listed for sale on her website, as well as on Amazon and eBay. Four of them quickly sell on her website, and then ten minutes later another eight sell on Amazon. She’s currently using a manual spreadsheet system to track inventory, and didn’t have time to update the inventory count to reflect these sales.
What would you do in a situation like this? Do you risk your reputation with buyers who have bought directly from your site, or do you risk displeasing Amazon? Neither option is great. Like our seller in the example above, you’ve spent a lot of time and effort branding your website and creating a loyal following of people who come directly to buy your products. And as you’ve grown, you’ve also put more and more of your eggs in Amazon’s basket. Not to mention, now you have to quickly (and manually) update your inventory on eBay before there are any more sales.
So what to do?
Bad buyer experiences on Amazon can lead to low seller ratings and with that, decreased visibility. Repeated instances can ultimately get you kicked off, which can be a deathblow to businesses whose livelihoods are tied to that channel. And if the current trends hold true, more and more sellers are going to be at Amazon’s mercy.
If you continue to rely on manually updated spreadsheets to manage inventory, this scary scenario is all but inevitable.
Most Online Sellers Have Been There
When starting out, most online sellers and eCommerce businesses rely on spreadsheets to manage inventory, along with many other aspects of their business. It’s just simply part of the growing pains of a new business.
For inventory and warehouse management specifically, this means having to manually update the sheets when orders come in and when product is shipped out. It means manually calculating which items are in stock, when and how much to re-order, not to mention finding the product in the warehouse. It means not always being sure about your ability to anticipate large scale buying trends that you need to stay ahead of in order to stay viable.
All of this can add to labor costs, which makes growing a business in a competitive market more difficult to do. The other consequence of relying on spreadsheets is that it can lead to errors that result in out-of stocks, mis-ships and slower fulfillment times, all of which make for dissatisfied buyers and provoke the ire of platforms like Amazon.
[Calculate your potential labor cost savings from using a warehouse management system like SkuVault with our Labor Savings Calculator.]
Realizing The Need To Adapt
There is always a point at which businesses realize they’ve outgrown their reliance on spreadsheets due to the limitations of timely and accurate information, as well as dealing with the inevitable human error that always tends to compound as volume increases and complexities increase. This is the inevitable ‘good problem’ of generating more and more sales and orders.
The prospect of changing a process as fundamental as warehouse management is daunting, especially when most sellers are used to their own ‘system’ of using spreadsheets. That’s why it’s important to use a warehouse management software that offers dedicated on-boarding and training, and can quickly get you up and running. It needs to have full capabilities such as barcoding, cycle counting, quantity buffers and real-time data-syncs.
Without a WMS in place, businesses are usually not able to sustain their current volume, let alone continue to grow. Once these solutions are in place, spreadsheets can now be used how they were intended - for managing specific reports and analyzing crucial data points that are important to your business.
Why Embracing New Technology Matters. A History Lesson.
Mark Twain is credited with the quip that “history doesn’t repeat itself, but it often rhymes.” What he meant by that is that while exact events don’t always repeat themselves, overall trends tend to hold true. Continuing this history lesson, about 100 years ago most farmers relied on plows drawn by animals to get the soil ready for planting. When the tractor was introduced, they had a choice to make; continue with what they knew to be reliable, albeit slower, or make the investment to upgrade to the new technology. Sure, a horse-drawn plow will get the job done - eventually - but when more and more of your competition is using a tractor, and by doing so gaining efficiencies and higher yields, the choice becomes obvious. Either embrace the new technology or be left behind.
While selling online may seem completely unrelated to farming, there are actually quite a few similarities with this example. Farmers who wanted to stay viable had to adapt or else lose out to the competitor who had made the investment in the new technology and taken the time to make it work.
Farmers who continued relying on a horse-drawn plow were less able to fulfill their yields and get their crops planted on time. Similar to the t-shirt vendor, this lack of efficiency cost them big time. And like farming, online sellers also have to understand complex networks of interrelated patterns and systems in order to be successful.
So whether you are an early 20th century farmer or a 21st century t-shirt vendor, if you don’t have the the right technologies in place, you won’t be able to sustain your current volume, let alone continue to grow.