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E-commerce: how to manage your stocks?


manage your stocks e-commerce

Faced with consumers who are increasingly demanding in terms of product choice and delivery times, e-merchants must be efficient. Although it is a puzzle for e-merchants, stock management is essential to ensure the long-term future of a commercial site. 

Why and how can stock management be optimised to boost your e-commerce? We can help you to untangle this integral part of your business.

Manage your stock e-commerce

The importance of good stock management

Essential to the smooth running of your e-commerce, stocks must be handled with care. Indeed, any stock involves a financial investment that is intended to be transformed into turnover.

Overstocking will therefore be just as harmful to your business as understocking. Overstocking blocks your cash flow and will lead to high storage costs, not to mention the fact that the e-merchant is never certain of selling all his products. Understock is fatal to customer loyalty, especially if it occurs frequently. That is why your stock must always be optimal.

Organising your e-commerce products

To avoid these problems, you need to organise your products according to what they generate.

Classify your products according to Pareto's law or the ABC method. The 80/20 (Pareto) law says that 20% of products generate 80% of the turnover. They should be rigorously monitored as they represent a high financial commitment, while the remaining 80% of products can be monitored more flexibly.

According to the ABC method, as in Pareto's law, 20% of the products represent 80% of the turnover. The difference here is the distinction of 2 other categories: B products will be the next 30% that generate 15% of the turnover, and C products that contribute 5% of the turnover will represent 50% of the stock.

With these product categories highlighted, you will know exactly which products you are not allowed to make mistakes.

Determining stock levels

Once this sorting has been completed, it is important to determine stock levels. To do this, properly analyze turnover rates, the frequency at which each product is replenished over a given period of time. An equally important factor in inventory management, supplier delivery time will also need to be taken into account.

The collection of this data will allow you to define for each product: the maximum stock, the minimum stock, the safety stock and the replenishment threshold.

The maximum stock will be the one not to be exceeded for cost and sales reasons. The minimum stock corresponds to the stock necessary to meet demand during the replenishment delivery time. The safety stock will meet the needs of e-consumers if the supplier's delivery is delayed or if demand increases unexpectedly. Finally, the replenishment threshold is the level at which a supplier order is required.

For the most complete stock management, other parameters will have to be integrated as they will influence demand. This is the case with market trends, current advertising, promotions, seasons, etc.

Obviously, if the products sold are perishable, stock management will have to be adapted accordingly. This is also the case for seasonal products, as is the case in the fashion sector.

Choosing a suitable stock management solution

Today, most e-commerce solutions such as WooCommerce, Prestashop and Magento offer stock management modules. If the range of products offered is relatively narrow, Excel can be a solution if you are an expert in spreadsheets. However, in the case of a very wide range of products or additional sales on marketplaces, software allows you to automate your stock management.

Optimised stock management is an additional competitive lever. It enables you to meet demand while facilitating product logistics, from supplier orders to those of your customers.


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