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Why e-commerce firms need physical inventory software

Why e-commerce firms need physical inventory software

As the e-commerce marketplace grows ever larger, companies in the industry will need to adopt better physical inventory software and optimize their Microsoft Dynamics NAV implementation in order to compete.

Around the world, more people are turning to online storefronts to purchase goods and service. A February report from eMarketer found that global e-commerce sales grew by more than 21 percent during the past year, with 2012 being the first year global spending topped $1 trillion. That growth is expected to continue throughout 2013, with worldwide sales expected to rise by more than 18 percent during the next few months to be worth close to $1.3 trillion.

While these figures should make e-commerce retailers happy, eMarketer's statistics also suggest that competition in the space is rising as well. As e-commerce sales increase, so too do the number of companies selling goods and services online. In light of this paradigm shift, e-commerce companies need to do everything they can to keep consumers happy and increase profit margins. One way to accomplish both goals, according to Practical Ecommerce contributor Dale Traxler, is to invest in physical inventory software and other solutions that make warehouse and shipping operations more efficient.

"Ecommerce companies typically focus on acquiring traffic and selling a wide range of products that shoppers will actually buy," Traxler wrote. "Many ecommerce firms track key performance indicators like new visitors, conversion rates, and average order values. But for many ecommerce companies, especially smaller ones, fulfillment is an afterthought. That is a mistake."

The specific benefits of physical inventory software
According to Traxler, businesses used to rely on manual processes to keep track of warehouse stock and to send out items to customers. Orders would come in, and then staff would use paper to find items and to make sure goods were sent out to the right location.

For companies with traditional storefronts, this system worked despite the clear problems with relying on manual processes. Since many companies exclusively shipped items from central warehouses to a specific number of stores, the amount of end locations to note was manageable. However, thanks to the rise of e-commerce, organizations now have far more endpoints to ship to since goods are sent directly to consumers. Plus, considering that any shipping error will likely lead to an angry customer and lost future sales, businesses need to move beyond legacy manual processes and embrace new solutions such as physical inventory software.

"In short, invest time and money into optimizing your fulfillment operations," Traxler wrote. "It will help increase profits."

To make sure new systems and technology are performing as expected at all times, Traxler recommended that e-commerce enterprises constantly monitor their solutions. This way, companies can be sure they are maximizing the return on investment realized from inventory control systems. Although these solutions should make operations dramatically more efficient, consistent review will ensure that the systems utilized maintain their usefulness over time.

For more information on improving efficiency with technology, download the free white paper entitled " Keeping the Physical World and the Virtual World in Sync" from DMS today.

Posted in: Inventory Management

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