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The power of an online store is created in the backroom

The power of an online store is created in the backroom

A clear, accessible online store with a functioning client interface is a great sales advantage. At the end of the day, however, it is just a small part of an online store’s business. It is important to get things right “beneath the surface” to allow growth, efficiency and customer satisfaction to flourish. 

There is probably little reason to look for power in small-scale e-commerce business. However, the larger the business grows, the more likely it is that you will find areas to make more efficient. 

Empowering your online store happens first and foremost in the backroom. This article focuses on three ways of making an online store more powerful: inventory and stock levels, product information precision and the order and delivery chain. 

1. Inventory and stock levels 

Customer service begins in an area few online store customers ever get to see: the store’s warehouse. Care or carelessness in inventory management directly affect the customer experience and how busy customer service will be. If the stock levels are not correct, customers may be disappointed. This situation may occur, for example, when the store’s product page says a product is in stock, even though it’s not. 

Many companies do stock-taking annually after the end of the financial year. We recommend doing it continually in a method known as cycle counting. Cycle counting allows for mistakes in stock levels to be corrected more quickly. The idea is to count a certain amount of product daily or weekly in such a way that all the product titles in the warehouse are counted in a desired period, such as six months. Inventory management systems will help you do cycle counting and correctness of stock levels.

In inventory management, precision and care are important. For example, a non-marketable or otherwise out-of-date product that is not in saleable condition must be removed from stock when noticed. This example may sound simple, but it is easy to forget in the day-to-day running of an online store. The goal is for the stock level in the system to always match reality. Stock workers’ careful work has a direct effect on customer satisfaction.

Stock levels are also strongly connected with growing your e-commerce business. For a strongly growing brand, ensuring that there is an optimal level of product in stock is challenging. Consumers will not put up with facing “empty shelves” many times in a row. 

2. Product information precision

Would you dare to order a product online yourself if the product description or images didn’t give clear information on the product features that are important to you?

Correct, accurate product information plays an important role both in increasing trust and removing barriers to purchase. Filling in product information is laborious but ultimately worthwhile: fewer customer service requests, fewer customer returns, and almost certainly better conversion. 

As an online merchant you should think about what it’s good for your customer to know about your product. We sometimes become blind to our own work and unable to see things from our customers’ point of view. Read more about how to create a product page that sells

3. Enhancing the order and delivery chain 

The order and delivery chain often hides many inefficient processes. These may include inaccurate stock levels, slow and inefficient order gathering, work which fails to add value, such as copying data from one system to another, and manual address labelling.

When your business begins to grow clearly, it’s worth moving away from order gathering which relies on people’s memory. It increases errors and is also poorly scalable. Each new employee is slow to learn the products and their locations off by heart. 

Once there are many order fillers in the store’s warehouse, it’s a good idea to move to optimised filling. Each product has a unique warehouse location and the inventory system directs the employee to the product via the optimal route, for example, with the help of a tablet. 

In this case, using temp workers during peak periods, for example, is easier: teaching the system to a new person is easier and there are fewer mistakes. The order filler simply follows instructions on what products to gather and what route to follow to the products. Order filling becomes more efficient and errors decrease with a modern inventory system that directs people’s actions.

In the absence of an inventory system, Shopify add-on apps can help you enhance your order and delivery chain. You should also stop sometimes to investigate how much time and money goes into the processing and delivery of a single order from your store. It may be revealing to calculate your sales profits in such a way that in addition to your purchase and sales price, you take account of the cost of the order and delivery chain and the associated working time. 

An online retailer should also compare whether outsourcing the online store’s warehouse is an option. There are several keenly priced warehouse outsourcing services available. 

Checklist for the online merchant: How to find inefficient processes 

  • Time work stages: What takes time? What could you make more efficient? 
  • Be self-critical about what you do. Just because you have always done something a certain way does not mean that you cannot develop it further.
  • Discover for yourself, for example just by taking notes, what happens during a single order.
  • Above all, analyse whether there is manual work that does not add value and which just consumes time.

Do you need more ideas about making your online store more efficient? Contact our experts

 

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