Have you ever looked up a product online only for it to be out of stock? Thereafter, you return to the website a week later to purchase another product only to be greeted with “out of stock” again. Not a pleasant experience to have with an e-commerce platform, neither is it the kind of shopping experience you would like to create for your customers. If customers are often met with out-of-stock situations whenever attempting to make purchases, it could lead to frustration and disappointment. They could decide not to purchase from the store which could potentially result in the permanent loss of a customer.
Another issue arising out from poor inventory management is having to cancel an order that has already been received. This happens when the stock count on the e-commerce platform is not updated in real-time. The order from the customer is accepted only to realise later that the product is no longer available. Talk about dashing hopes, definitely not a situation anyone would want to encounter as a customer!
Location of Inventory
Poorly organised warehouse and misplacing of inventory could result in the inability to locate items leading to delays or failure to deliver items to customers.
Why is this a problem? Maintaining trust with customers is key. By frequently failing to deliver an item on time, customers could turn away. Neither the business nor customer benefits from an inefficient system.
Some might simply choose state a longer delivery time to accommodate the inefficiencies. However, a longer delivery time could be detrimental for an e-commerce business, especially if competitors are able to deliver in a shorter time frame.
The loss of inventory due to theft or administrative error. This is when the actual inventory level is lesser than the recorded inventory level which results in losses.
Poor Customer Service
As the above has shown, being unable to account for your inventory in real-time could result in poor customer experience which is of great importance, considering that there is no lack of alternative choices in the market nowadays. Customers can easily explore other options with just a few clicks on their smartphone.