Managing Customer Delivery Expectations While Keeping Minimal Inventory for Your E-commerce Site

by Jill Foster on May 14, 2009

Dropshipping removes all inventory ‘issues’ right? Think again.
As an ecommerce site that primarily depends on dropshipping (shipping products directly from the manufacturer to the end user) and keeps few products in storage, inventory management might seem as if it’s someone else’s problem. After all, dropshipping is all about not handling inventory, right?

There is no doubt that the benefits of dropshipping are high (image Ice Drop Shadows by Via Moi, Creative Commons): –minimal expense for upfront inventory, low product storage fees and reduced risk of getting stuck with unsold merchandise.

However, to successfully execute, you need to manage both your own inventory (however minimal that may be) as well as closely track the inventory of each of your manufacturers.

Bamboo Cloud Chandeliers: reviewing my own inventory practices
A recent experience encouraged me to review my own practices for managing inventory.
DailyCandy, a popular lifestyle site, contacted me on a Monday afternoon, asking for details on our Bamboo Cloud Chandeliers for their Spring 2009 Green Guide for our local market (Washington, DC) to be published on Wednesday morning.

I immediately knew that I had exactly ZERO in my own stock.
And panic struck when I realized that I wasn’t entirely sure whether the manufacturer had them either. A quick phone call confirmed that, gulp, two of the four available styles were out of stock. Their next delivery was arriving in 5 weeks — an eternity in the eyes of many online shoppers.

Not about to give up the opportunity for publicity…
I did the best I could with the situation and noted the delay prominently in the product description so that it would be obvious to visitors. In addition, I added an extra week to be certain that it would reach the customer well within its expected timeframe. I knew this meant possibly turning off some potential buyers but those that purchased it would be tickled with the fact their delivery arrived on or ahead of schedule and also would be more likely to become repeat customers.

So, in summary, if you have an ecommerce site, I have learned it’s important to do the following:

  • 1) Be very aware of (a) standard lead times for packing and shipping each of your manufacturers in-stock items and (b) how long it will take them to restock products that they have sold out of. Both can vary significantly from manufacturer to manufacturer. Note lead times clearly in each product’s description. Generally speaking, I always overestimate in case of any unforeseen delay.
  • 2) Make sure you are receiving regular stock updates and changes from your manufacturer and syncing it with the information presented on your site. These updates will show both “out of stock” items as well as those with “low inventory”, enabling you to have some advanced warning of possible product availability issues.
  • 3) Weigh the value of keeping your most popular items in stock against the cost of storage. It is a wonderful feeling to be able to ship someone their order with just a few clicks of your mouse and not depend on someone else’s timely fulfillment.
  • 4) Realize that your customers assume that everything is in stock unless you inform them otherwise. Not setting their expectations by giving them complete information is setting your customer and yourself up for disappointment.

By giving visitors complete details up front you are empowering them to make the best decisions for their needs, which ultimately results in a happy customer.

Do you have an ecommerce business?

Please share your thoughts on how to best handle your inventory and your customers delivery expectations in the comments.

rebecca-malik-picGuest post by Rebecca Malik, president of online contemporary furniture business 17th and Riggs. Rebecca thrives off of beautiful home design and explores related conversation at her blog The View from 17th and Riggs. She lives in Washington, DC with her husband (…and growing pet family). Rebecca welcomes your visit at her blog or www.Twitter.com/RebeccaSM.

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