How to Choose Between Static and Dynamic Pricing
Whether establishing an eCommerce storefront or adopting a multichannel marketing approach, having...
If you already have an online store (such as through your business website or another channel such as Amazon) you certainly have had to deal with the issues of effective Inventory Management. Ordering too much, not ordering enough, uncertainty of your stock at any given moment…these are all issues you’ve had to deal with, I’m sure.
These challenges might also have more of an impact on you than just missing an order or two here and there. Selling through just one channel might be too much for you to keep track of if you’re doing things manually! So…instead of expanding into different channels, or expanding to an international market to open up MANY new opportunities, you might be content to simply sell through one little channel and be happy with it.
It happens to a lot of businesses…the entire Inventory Management task becomes a bit too overwhelming, especially since you’re trying to run the entire business. This is where an inventory management system comes into play. With a solid IM system in place, your inventory controls can be automated resulting in a higher number of orders fulfilled, less “missed shipments” due to over-selling AND it can open your business up to new channels that can lead to more sales and more PROFIT!
Our Store Automator Inventory Management software can help your company get a better handle on your IM issues immediately. And, in a short time, you can start feeling more comfortable about your ability to expand into different channels so you can get your product in front of more people! But…let’s take a look at some specific issues with Inventory Management and how a sophisticated (yet easy to use) software can make all the difference.
Overselling and Over- or Under-Ordering:
Let’s start with the largest issue…over-ordering your product from suppliers resulting in too much stock, and the flip side of that coin, overselling an item because your stock wasn’t correctly reported.
Having either issue pop up is a major issue as one results in high inventory costs and the other can damage your reputation! You need to be on top of your inventory levels at all times. The more channels you sell through…the more important this becomes.
Imagine if you will that you have 1000, 5000…even 50,000 products for which you need to maintain excellent control and stock levels. How might you do that? Are you perhaps still using some sort of Excel spreadsheet? Are you depending on people to keep you informed of levels on a daily, weekly or monthly basis? Are you able to track the current sales levels across multiple channels with everything pooling into one spot?
That’s where an IM software comes into play. Just look at the example below of a Store Automator client to see how our robust yet easy to navigate software can give you inventory levels at a moment’s notice!
It’s quite simple…if you’re looking to expand and grow, to sell more products throughout numerous channels…then you MUST utilize an Inventory Management program! It will help you eliminate the double-edged sword of over/under ordering and over/under selling!
Multiple Channels to display your product:
This ties right in with the additional sales channels I mentioned earlier. The more outlets you have, the more challenging IM can become which makes an IM software essential. The thing is…especially in peak seasons…orders (and therefore inventory levels) can fluctuate wildly and quickly. Even if you’re keeping track of things without a software, the speed at which things can move makes it challenging. You might wind up being out of stock so quickly that it potentially can ruin an entire peak season for you!
That’s why, as part of any Inventory Management software, you must be certain that it can provide you with one single location to view all of your info in one spot…regardless of how many channels you’re working with.
As an example, below is a screenshot of the Store Automator Channel module that shows many, many different channels that are being incorporated into the home pages for this client. If someone buys Product X in Germany, another buys 6 in Japan, you MUST have confidence that all of those purchases are being pulled into one location IMMEDIATELY so you can maintain the IM control that multiple sales channels demands!
Would having something like this…a software that tracks inventories across multiple channels…give you the confidence to expand into different markets? Knowing that your levels will be automatically monitored and available at your fingertips at any time SHOULD give you the boost you need to consider getting your product out in front of more people. More sales, more profit!
Pricing and its effect on Inventory Management:
Finally, we’ll touch once again on the pricing of your products. Although in Part 1 we touched on Pricing issues, and we will dive into that more in Part 3, it’s important to discuss pricing again as it relates to Inventory Management.
During periods of high activity, such as peak seasons or periods of higher-than-normal competition, your pricing will have a significant impact. Set your pricing too high and you’re stuck with inventory on the shelves collecting dust. Set your pricing too low and you’ll be out of stock in no time leaving you with missed opportunities and lower profit margins.
This is precisely why you need to manage your inventory AND your pricing structure effectively. This is also why Store Automator focuses on both aspects…IM and automated pricing.
When dealing with dozens, hundreds or thousands of products you certainly know that your pricing needs to accurate and fluid. As your competition raises and lowers their price, so must you accordingly. If you’re not managing your pricing with an automated system then you’re missing out! Sure…you might be selling more, but are you selling at the profit margin you need? When everyone low-balls their pricing to get rid of their stock, are you the only company out there that’s priced 20% higher than everyone else? What might THAT do to your reputation?
As pricing fluctuates, you must be sure to maintain a proper balance. As the level of competition increases or decreases, you must be sure you’re taking that into account as well! If you have a thin profit margin, you must be certain that you’re not losing money on each item sold! This is why you must have a repricer that ties into your inventory management system. Clearly, one without the other will leave you only halfway prepared.
Take a look at example below of the Store Automator repricing screen from one of our clients. All of the changes you see below as competitors and their pricing changes are all automated.
Can you think of a reason why you should only have one of these components and not the other? Imagine the time savings AND the profit margin boost you’ll receive once you tackle both of these issues together!
If you’re still doing things the “old fashioned” way when it comes to your Inventory Management, we certainly hope with this brief discussion you understand the vital importance of an IM software to take the load off, improve accuracy and improve your margins. Inventory on the shelf or missed sales opportunities due to the lack of information and control will only hurt you. What is the COST of missing these opportunities to your business?
To take it a step further…what is the LOST OPPORTUNITY to your organization because you’re not selling into different channels because you’re finding it too difficult to track your stock levels with just one? If you have a good product at a competitive price but you’re only in front of 10% of your potential client base…what are you waiting for?
If you’re ready for a more in depth demonstration of the Store Automator software, the time is NOW to reach out to us to get your demo scheduled! We’d love to chat with you about where you are, where you want to be and what’s been preventing you from getting there…then we’ll tell you how Store Automator can help!
We are experts in eCommerce and Automation with 100+ years of collective experience.