As e-commerce sales become an increasingly integral part of the retail industry, companies should consider using warehouse inventory management software in conjunction with an ERP platform like Microsoft Dynamics NAV to make sure they are best able to reach this growing marketplace.

Thanks in part to trends such as rising global Internet usage, e-commerce has grown significantly and will likely continue to do so over the next few years. According to eMarketer, e-commerce sales worldwide topped $1 trillion for the first time ever last year, and the number of online shoppers globally should go from more than 903 million in 2012 to more than 1.3 billion by the end of 2016.

E-commerce presents numerous opportunities for all companies, and its benefits are especially appealing for smaller firms and companies located in remote regions since e-commerce enables them to quickly and cheaply expand their audience. However, according to the Australian Financial Review, e-commerce also can make it much more difficult for organizations to become and to remain profitable since the number of competing firms rises as well.

"But there are still substantial sums of money being burnt as new retailers try to elbow out traditional bricks and mortar players," the news source noted. "However, keeping increasingly fickle customers is proving problematic, with one misstep enough to cause a rapid exit into the arms of a new competitor."

Overcoming e-commerce challenges with technology
A key variable to consider before opening an e-commerce storefront, according to AFR, is how costs may rise as a result. While getting an e-commerce website up and running is typically far more cost-effective than starting a new physical storefront, online operations often have higher supply chain-related costs.

In a traditional retail setting, a company has only a set number of locations to ship products to. For instance, a business with five storefronts will always ship goods just to those shops. With e-commerce, however, organizations now have as many shipping endpoints as they do customers. This means that it costs more than ever to ship out goods.

Additionally, e-commerce raises supply chain-related costs because it also lowers the margin for error, AFP noted. E-commerce dramatically levels the playing field, thereby turning far more firms into direct competitors. As a result, even a seemingly minor error will spur a customer to use a competitor in future buying instances.

"Costs – a large portion of which stems from expensive IT systems and warehousing, and the actual deliveries of goods to people's homes once they've been ordered online – are stubbornly high, and the new revenues coming in may not be increasing as fast as they need to," the news source said.

To maximize an e-commerce investment, AFR recommended that companies spend more time keeping existing customers happy instead of trying to constantly find and tap new revenue streams. In order to make sure this becomes a reality, companies may wish to install warehouse inventory management software. With such a solution in place, businesses can more cost effectively keep its facilities well stocked and ensure that the items existing customers want are always available and are ready to be shipped out at a moment's notice.

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