When it comes to running
your online store you need to decide where you are going to keep your
inventory. Are you going to look after your own stock, or use a
method such as dropshipping?
To help you decide, we've
listed the pros and cons of stocking your inventory, business, so you
can choose the right option for you.
1. You can provide better
If you have full access to
your inventory then it allows you to provide better customer service
because you're cutting out the middle man. If your customers come to
you with a rush order then you can reduce the time they have to wait
by sending it out straight away.
You don't need to worry
about the quality of your products as you will be able to check them
before you send them out. And if there is a problem with your
products, you can deal with it instantly, without having to put
the problem on hold while you contact your supplier.
2. You can take advantage
of bulk savings
Suppliers will offer plenty
of savings if you buy in bulk and this can definitely be worthwhile
to your business if you map out the inventory you will need. You'll
never fully know how much stock you will need, but if you do end up
with too much, then you can always run a promotional sale on the left
over inventory and attract new customers.
3. You can manage how much
stock you'll need
When you get an influx of
orders and you don't house your own stock, there isn't really much
you can do about it, other than hope that you can find a supplier to
deal with a huge order. But if the control is in your hands then you
can prepare for any occasion. If you're running low on stock then you
can order more, just in case. Plus you'll come to learn when stock
will be in high demand, especially if you are running a promotion.
4. You can entice more
Did you know that boosting
retention rates by just 5 percent can actually
raise your profits by 95 percent? Looking after the customers that
you've already got is an important factor to the success of your
The great thing about
sending out your own products is that you get to package them however
you like. This means that you can personalize each order and include
tasty offers that will entice your customer to shop with you
5. You can stay on top of
If you are personally
sending out your products direct from your business then it allows
you to stay on top of deliveries. If a customer has not received
their order then you can find out why and resolve the issue
immediately. You will also get the choice of which delivery method
will suit your business, so you can choose a company that you trust,
and that offers a great deal.
need to invest in your inventory
buying in bulk is great for saving you money, if you have only just
set up your store then you may not have the money to buy stock until
a customer makes an order. If you can't
afford to buy products in bulk then it is worth using drop shipping
until you have made enough money to keep the stock at your business.
need space for your products
of the biggest set backs is that you will need enough room to store
your products. More often than not you will have to invest in storage
space which can be quite pricey. This can also incur costs to
maintain and run, which means you'll have to put your prices up on
your products and you could end up losing out in the long run.
inventory could become outdated
you will need to buy in bulk there's always the risk
that you won't shift all of your stock and it could become outdated.
Say for example you are selling Christmas jumpers - clearly there is
a limited time that you can sell them for - and if you don't manage
to do this then you'll end up with a bunch of jumpers that you can't
even put on sale as they will be outdated.
work is involved
care of your own stock definitely requires more work on your part.
Not only do you need the space for it, but you need to keep track of
how much you'll need in future and keep full control of deliveries.
The great thing about running an online store is that you can do it
from anywhere – but this isn't really possible if you have to
manage the delivery side of your orders too.
have to pay insurance
not something that you may have thought of, but it's one of the
unfortunate facts of life. If you have all of your stock at your head
quarters then you are going tohave
to pay higher insurance premiums.
You're risking the chance of loss, theft, or even fire/water damage
to your stock and if this happens then you will lose out on sales,
and quite possibly loyal customers.
Your inventory is clearly one of the most important
aspects of your business, so it's definitely worth thinking about
where you are going to keep it. If you have the space to look after
your own stock and the time to manage deliveries then it may be
beneficial for your business to do so.
If you have very little money and can only afford to buy
stock when a customer buys from you then it may be worth using drop
shipping. There is no right or wrong answer, it really depends on
many factors for your business.
us know what you decide to do in the comments below and if you need
up your online store,
then we are more than happy to help! Connect with us on Facebook,
more handy posts like this one.