Cloud-based inventory management software could make you a millionaire someday—if you know how to use it right.
If you're in the business of moving things around, no matter what you're buying or selling, learning to automate your inventory control system could be one of the most efficient ways to cut costs, boost profitability, and track inventory across your whole supply chain.
Obviously, this isn't as easy as flipping a switch. To get the most out of an inventory management system, small businesses especially need to implement a cloud-based inventory management system that's simple and intuitive and preferably doesn't take a grad school education to implement.
This article is about switching to a cloud-based inventory management system as easily as possible across multiple marketplaces.
What's out there, and what are your options? What does a system like this do for growing businesses, and how can it go wrong? Most of all, how can you get the benefits of these software solutions without the growing pains that go along with them?
What Is Inventory Management?
Inventory management is how you track and control all of your company's products. That's everything that you own, including raw materials, semi-finished products, machine tools, on-premise desk chairs, sales inventory—everything.
That's a tall order, and you're going to need a pretty smart inventory management solution to handle the ordering, storing, consumption, and sales volume in something like a real-time environment. It would also be nice if you had decent metrics to keep an eye on inventory data, workflows, and forecasting.
Recording inventory levels is one thing, but guessing what you'll need in a month takes a little extra to avoid costly under- and overstocking.
How Can You Automate Your Inventory Management System?
In the old days, all this tracking was done with a spiral notebook, an abacus, and colored pebbles in a jar. You need something smarter to streamline your purchase orders and warehouse management.
Even a primitive stock management system from the '70s uses barcode scanners and POS handhelds to track sales as they happen. That data then goes into digital spreadsheets to update your stock levels as they change. This POS system never needed sophisticated accounting software to run properly. Still, even early barcode scanning models were a huge improvement over the time-consuming chore of inputting serial numbers for end-of-month asset tracking.
Today's cloud inventory management software is enormously faster and more capable. Cloud-based inventory management software uses the same barcode system but remotely monitors stock levels with real-time updates to pricing, asset tracking, and order management. Apps with higher functionality can help improve forecasting, sales orders, and notifications any way you want to get them.
Say you have a solid ecommerce T-shirt business that's been growing steadily, and now you're expanding up the supply line to manufacture some of your own shirts instead of importing them from China. This widens your margins and adds a lot of complexity to your supply chain and inventory management.
With a cloud-based inventory management system, you can track the stock at every step, from the delivery of the T-shirt blanks and the printing supplies, the finished product in the warehouse, and delivery to the customer after it's shipped.
the 5 Main Benefits of Cloud-Based Inventory Management
There's a lot to recommend the switch to cloud-based inventory management software. Once you get it set up, cloud-based software is easy to scale, safe, and has the functionality you can use to optimize your stock and forecast your needs for as long a time horizon as you're working from.
1. Easy to set up
To get started with cloud inventory management software, you have to have an internet connection. . . and that's about it.
Because the software is hosted on a remote server, you get the benefits of having a smart IT department to keep you updated on all the latest patches and security settings. You can also get professional help setting up any configuration you want or making changes as your needs evolve.
2. Easy to scale
Operating from a cloud server is great for a growing business. Scaling up in the cloud is as easy as asking your host to expand your capacity or add new functionality to your existing package.
Cloud inventory management software like QuickBooks can even scale up by interfacing with other systems, such as automated filing of tax documents.
3. Stock optimization in real time
Real-time stock optimization is maybe the biggest step forward in modern inventory management. In the old days, your order management placed replenishment orders as your stock ran low, usually with a two- or four-week lag.
This is a good way to run out of stock, especially in a time of shortages. Automatically updating your stock as it moves, rather than when you have a minute to do the books, speeds up your capital and moves more products more efficiently than ever before.
4. Reliable forecasting
Good forecasting is the flip side of tracking stock effectively. It's easier to forecast your needs tomorrow than two weeks from now, which is why the real-time tracking cloud inventory management software gives you allows you to order as stock gets depleted. This effectively shortens your forecast horizon to 24 hours from now rather than 24 days like in the past.
5. Safety and security
Your inventory numbers are secure documents, and keeping them safe should be a priority for ecommerce retailers in a competitive field.
Cloud-based inventory management software uses industry-standard encryption to keep data confidential, which your customers should appreciate as they send you their credit card information for billing.
How to Choose the Best Cloud-Based Inventory Management Software?
There are several cloud-based inventory management software products out there, and if you're going to get a good one, it helps to know what you're looking for.
Basically, you want something easy to interface with on multiple platforms, integrates multiple functions into a smooth workflow, and optimizes industry best practices to get the most out of the package you're paying for.
Everybody needs something different from their cloud solution, but this article covers the most popular options you're probably already looking at. The short list of inventory management features you need to look for is:
- Centralization: Connect tools to your sales platforms with a single database. This spreads changes across all reorder points as soon as you update a single interface, which limits the potential for errors.
- Notifications: You need to know when something is running low, and you need to know it right away. A good program lets you pick how you get notifications of impending stockouts.
- Multiple access points: You will connect with this software from your office, warehouse, and mobile device. It needs to be equally accessible from all of these, or you'll be running back and forth between locations to update your purchase orders.
- Tracking of orders: This one is obvious. An inventory manager that can't see what's selling as it moves is of limited value to your Amazon store, let alone to a standalone website or brick-and-mortar store.
- Smart carrying: If you have stuff in multiple warehouses, which one are you using to fill orders? Good software will let you designate a first-choice fulfillment center, with the less efficient choice as a backup. It should also permit seamless inventory transfers between locations.
- Integration: The benefit of cloud software is the connectivity it brings to the game. Your software should be talking to logistics partners, order pullers, vendors, and even customers as part of your sales support system.
- Dedicated B2B support: Your business interacts with other businesses, even if you're primarily a customer-facing company. No matter how customer-focused you are, you still have vendors and contractors, and they might as well have managed inputs from your various sales channels as well.
- Supply chain integration: Inventory tracking today isn't just getting an email when your product ships. With the right software, you should be able to see where the materials are in the manufacturing process, even before the inventory is ready to ship. Just think about what this does for your ETAs and forecasting stock levels.
What's Next for Inventory Management?
QuickBooks and other ecommerce platforms are great if you're shopping off the shelf for inventory management tools. Still, there's no substitute for having the know-how to run your own cloud-based inventory management software.
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Also Worth Checking Out: Order Tracking Software for Online Stores