Effective inventory management coupled with proactive returns management is at the heart of retail success.
You cannot wing your inventory management system or returns management services and expect to win. You need to have a modern, agile software to seamlessly handle product inventory and returns processing that reduces risk, boosts efficiency, and promotes growth.
To do that you need to follow best practices.
Best Practices for Unlocking the Power of Inventory and Returns Management Solutions
Following best practices can define a company’s success and enable them to stand out among competitors.
Optimizing inventory and returns services and software are how retailers from SMB to large scale enterprises have the capability to scale and provide customer service excellence, retain customer loyalty, and build brand equity.
Here are 10 best practices to help grow your retail business when it comes to managing your product stock, product returns processing, and how to reduce returns in eCommerce.
#1. Upgrade Your Inventory Management and Reverse Logistics Software with a Returns Management
Many retailers today rely on outdated inventory management and product return management software, missing out on the massive savings provided by new, innovative, and efficient forward and reverse logistics software.
Advanced AI like what is found in our R1 program can drive complex data gathering and deep”” learning analytics, resulting in the highest sell-through and net margins for every touch, movement, sort and pricing decision.
If it’s been more than five years since you revisited your inventory and returns management softwares, you could be missing out on millions of dollars in potential profits.
#2. Enhancing Returns Management with Smart Contracts
You’ve likely heard of blockchain technology, but do you know that it is already revolutionizing the way inventory contracts are managed by returns software?
Smart contracts allow companies to build in automatic payment transfers based on contract activity. This can be particularly advantageous in inventory liquidation, as manual payment processing can be skipped, with parties automatically receiving activity-based payments based on the contract.
We use hyperledger fabric smart contracts here at goTRG. Other options include Ethereum and NEO.
#3. Maximizing Returns Recovery with a Centralized Inventory System
Using a fractured and scattered inventory data collection system can hurt your business.
First off, a spread system is prone to errors. Also, it leaves your system vulnerable. Next, it leads to duplication of duties. Finally, it causes system clashes since operations are not synchronized.
Work on using technology platforms that help you integrate and centralize your company’s processes. A centralized inventory system allows you to:
Get up to speed with inventory levels at a glance.
Enter required inventory data once not repeatedly.
Bring down mistakes of selling the same product twice.
Fulfill orders quickly and efficiently.
Increase efficiency for product returns processing
Clearly, centralization is the way to go.
#4. Manage your Aging Stock and Returned Products with a Returns Management Solution
Aging stock can eat into your profits … fast.
Here’s how to deal with a stale inventory or returned items that are difficult to resell:
Sell-through rates and weeks of supply are handy metrics when handling aging stock. Calculate them so you’re not stuck with old stock, waste precious space and tie up cash in obsolete inventory.
Partner with a returns service to help you with the full turnkey returns management solution or some of the steps involved in managing a return, from initiation to next life to recover profits and be environmentally responsible.
As a last resort, mark down old stock and sell it so as to create space and have the cash to buy new stock. Or you can donate to it to the community and demonstrate your brand’s commitment to CSR (Corporate Social Responsibility).
#5. Prevent Costly Errors with Regular Inventory Audits to Improve Returns Management
You need to set up an effective internal counting cycle.
Use the following questions for guidance:
How many counts per year? (frequency)
How to count: item, category or value? (strategy)
Who’s in charge? (personnel)
Make sure what you have on the ground tallies with what’s in the system.
In addition, invest in external consultants. Specialists can unearth hidden hitches in your system, give you invaluable ideas, and update you on the latest inventory management technology.
#6. Leverage Consumer Spending Trends for Effective Sales and Returns Management Solutions
Demand forecasting helps you predict your inventory needs.
Dig into your order and returns stats and identify peak and low periods of demand for your products and subsequently their returns, such as the winter holiday season.
Analyze sales data to identify your best sellers and worst sellers and balance your stock. Use social media to do surveys and Google trends to gauge current customer trends.
Use the results to accurately predict demand.
#7. Assess Supplier Performance to Optimize Sales Process and Returns Management
Your inventory management system should include your suppliers.
You need to have a compliance program. It enables you to deal with product problems up the supply chain before they reach your premises. Enforce vendor compliance through in-depth inspections.
Your compliance policy should cover:
Routing guides, item specification sheets, retail and direct packaging, accounting standards, chargeback policies, advance shipment notice (ASN), reverse logistics solutions, and acceptance/rejection criteria.
Drop non-performing vendors and get new ones who’re willing to meet your specifications.
#8. Returns Management Efficiency: Learn from System Failures
Research and learn from times when your business experiences high return rates.
Key points when this is likely to occur are:
during peak season.
after a launch.
a sudden spike in sales.
You need to dig into what was the reason for the returns and how you dealt with the product return processing. Figure out what went wrong, what were the bottlenecks, and fix them. It could be that you failed to process the return in time. Or maybe you didn’t watch your sales velocity closely enough.
#9. Customer-Driven Returns Management Solutions
I know you may be wondering but, yes, customer service impacts on your inventory.
Here’s how.
If your customer service standards are stellar and customers are impressed they’ll buy more and move your stock fast. On the contrary, if your customer service is poor, your stock will collect dust on the shelves.
Train your workers adequately so they’re able to promptly respond to customer return queries and confidently explain product specifications.
#10. Implement Quality Assurance in Reverse Logistics to Improve Customer Satisfaction
Quality control procedures ensure customer satisfaction. Satisfied customers buy more which keeps inventory moving.
For a start, use this basic checklist to check all received products for the following:
Signs of damage: are there any leaks or tears?
Discrepancies in descriptions – are product colors, styles, and sizes identical to purchase orders?
Storage- are goods stored in a place that can ruin your inventory quality?
If product quality doesn’t meet the standards it must be promptly returned to the supplier.
Conclusion
To win, you’ve got to upgrade your system to match what the best in the business do. However, always remember that your business is unique and tweak some of the methods to fit your context.
Adopt best practices for a faster, cheaper, and easier inventory and returns management system that gets cash flowing at an optimum rate.
management is the heart of retail. You cannot wing your inventory management system and expect to win. You need to have a modern agile system that reduces risk, boosts efficiency, and promotes growth.
To do that you need to follow best practices.
