The number of companies that have fruitfully adopted cloud inventory management solutions in their e-commerce business keeps growing annually. This process is happening due to the flexible functionality, automation, and optimization of the e-commerce workflow, which makes such a helpful tool demanded.
This article will reveal the cloud inventory management significance for the e-commerce businesses, the system’s existing types, and functionality to pick a relevant set of features for your case.
Cloud-Based Inventory Management System: Concept and Notion
The cloud ERP is a tool for an eCommerce business to track and observe inventory levels in real-time. There’s no clue why cloud inventory tracking has become more popular in comparison with conventional instruments. This is due to the adaptiveness and convenience provided by this solution since all parties have the necessary data on hand regardless of their location. Users are welcome to apply both smartphones and tablets to use the software, and it will operate while the device remains online.
The description of the inventory control may make lots of users think that it refers to tables in Excel, or in other words, the manual record keeping. While rapidly scaling, e-commerce companies keep greatly profiting from automated stocktaking, sales projection, and easy-to-use availability observation.
The Significance of Inventory Management System for the E-commerce Business and Challenges It Overcomes
The main objective of cloud-based inventory management solutions for the e-commerce industry is availability monitoring within the whole workflow performed by the company. The features and functionality to implement are determined by the business concept and, essentially type of goods it delivers.
Let’s define some potential features worth adopting to make the software maximally profitable for the e-commerce domain:
- Inventory monitoring and streamlining opportunities
- Orders tracking and invoices
- Insights creation analysis
- Barcode and batch control
- Items pricing list
- Possible integration with existing entity’s software solutions and tools
Why Is Inventory Management System Beneficial for the E-commerce Industry
Statistics indicate that inappropriate inventory management results in substantial financial losses for e-commerce entities. In particular, they are equal to $1.75 trillion annually. There are the main 3 types of faults that cause such lesions:
- $642.6 billion (yearly avertable returns)
- $634.1 billion (unavailable yearly goods)
- $471.9 Billion (excessive yearly stocking)
Roughly speaking, the united influence of excessive items availability, goods lack, and avertable comebacks addend approximately 11.7% of every year income lesion in the e-commerce industry. Applying a solid cloud inventory management tool decreases such ventures.
Why are these features beneficial for e-commerce businesses?
- Enhanced business performance and output indicators increasing
- Processes automation
- Human factor mistakes elimination
- Enhanced business to business connection
- Reaching magnified functional effectiveness
- Combined production and stocktaking observation
According to the insights, 46% of modest-scale companies comprising a staff of 11- 499 workers still haven’t integrated the cloud inventory system. The prevalent number of the entire e-commerce market players apply no inventory management tools at all or stick to utilizing traditional notebooks, and some of them keep using Excel for this goal.
Therefore, it’s high time to find out which type of e-commerce management is the most convenient, useful, and profitable. Let’s compare them together:
Inventory management applying tables
Applying this type of instruments, functionality, and calculation system of Excel or Google Sheets is great to cover the primary requirements of each e-commerce company. Spreadsheets are able to perform manual inventory observation for startups, not huge-scale entities.
There is no charge for the usage of spreadsheets, yet, the functionality is also limited. In case the business was established recently, such instruments can provide easy-to-use manual in-stock monitoring. However, your employees should be sufficiently competent and accurate to eliminate human-made errors, as there’s less automation and more manual actions with this type. Consequently, table utilization may cause fatiguing revisions in case of an error.
- Simplified applying
- Only relevant features with no undue ones
- No automation (requires constant huge manual engagement)
- Higher faults risks due to the lack of automation
- On online information refreshing
- Bounded opportunities
- Less advanced features and abilities
What e-commerce companies can profit from such tools? As was previously mentioned, startups, newly established, and small companies that generate $50k or less yearly should select this option. Such entities often possess a modest in-stock goods variety. Thus, spreadsheets and tables are a great choice at the initial stage of the business and prior to the business scale.
Cloud-based ERP System for Ecommerce Business
In contrast with the previous type, which is available for use only on private devices, cloud technology ensures access for all members and participants. The software operates via the Internet, locating all the information on a third-party server.
Due to such characteristics, the cloud inventory tracking system liquidates the setbacks, failures, and complexity that are generally faced when working with tables. Such profitable opportunities define why cloud-based software is on-demand globally, especially for the e-commerce industry.
- A custom-architected solution to perform inventory tracking for the specific company
- The one and the only resource of reliable data
- Updates happen in real-time
- Automation of frequent processes
- Cut down mistake possibility
- End-to-end internal processes organizing
- Considerably cut down cloud security risks
- The opportunity for native solutions implementation as well as third-party instruments integration
- Regular refreshing, implying the newest data available
- The architecture allows the scaling process to happen parallel with the company with no need to purchase and adopt extra tech tools
- Requires more expenses rather than the first option
- Needs adoption and training process
Which e-commerce entities should go for cloud inventory tracking? A system moved to the cloud environment can be a brilliant instrument for moderate-scale companies having a yearly turnover within the confines of $100 thousand and $100 million. Business expansion is also provided for this type of software, as it ensures essential resources to handle the growing workload of the e-commerce company.
ERP in-stock control for eCommerce business, an abridged version of the enterprise resource planning solution, represents a full-fledged instrument for the company’s strategy development and organization. Such a tool brings the capability for entities to track and have extended control over their financial flows and all the inner processes through the one united software solution.
The latest report indicates that the cloud ERP solutions market is forecasted to have a value equal to $40.5 billion by 2025, with the progress at a CAGR of 13.6% from 2019 and within the following 3 years. Commonly, ERP software is designed for entities supplying a wide range of products. That’s why the ERP systems of an eCommerce business retain a significant role in the development of the market.
Modest-scale companies and startups sometimes don’t possess sufficient financial resources to contribute to ERP software development, making a difference with basic cloud inventory management software.
Besides, enterprises that generate less income simply can do without the extra features and opportunities delivered by the ERP.
- Opportunity to process a great diversity of multistage e-commerce operations
- Taking advantage of vast data loads
- Enhanced inventory tracking
- Regular assignments automation
- Highly solid information protection
- Connection to the existing software solutions
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- Increased expenses
- Time-consuming integration and adoption
- Complicated internal processes
- From scratch scripts to integrate advanced tools (if required)
- Excessive number of extra features
For which business may this tool be relevant? ERP software may serve as an excellent tool for large-scale businesses that have been many years on the market, having an annual turnover of $100 million or even more. Such entities need expanded features and tools covering cosmopolite businesses and entities performing through several sales sources.
As we may conclude from the post, the integration of the cloud inventory system into the e-commerce businesses is pretty beneficial and may substantially streamline the company’s internal processes, bringing higher productivity. Yet, its integration complexity requires the competence of the experienced tech vendor. Credible software development partners will implement the necessary functionality according to your business needs.