The Coronavirus crisis poses many challenges, both on a personal and business level. Many entrepreneurs struggle to keep their heads above water. But, for others, these are unprecedented times due to a growing demand for certain products.
For example, more consumers are now working from home and are doing their best to stay healthy while at home - many etailers are successfully using that fact to their advantage. The demand for garden and sports equipment is increasing explosively. On the other hand, some webshop owners are not so prepared and are demonstrating “hamster behavior” where they are forced to stock up on supplies. Do you also have trouble with your inventory management in times of crisis? In this blog we offer 3 useful tips that you can put into effect immediately.
Hoarding behavior not only visible to consumers
Webshops dealing with tourism and holidays are struggling, and the picture is also variable for fashion web shops. But many other non-food webshops are seeing their turnover rise explosively, according to figures from market researcher GfK. People want to work at home efficiently and comfortably and therefore stock up on headphones and webcams. Being forced to stay close to home for several weeks, many online shoppers are ordering more do-it-yourself products, games, and garden supplies. The consequence? The hoarding behavior also spreads to some web shop owners - web shops that want to build up enough stock to get through these times and to be less dependent on suppliers. For example, when the Coronavirus first reached the Netherlands, omnichannel player Coolblue would fill their “very large sheds to the brim” in order to be prepared for availability problems at the suppliers. Probably a smart move from this player, considering that many of the product categories they offer are now doing better than ever.
There is a profit to be made - if your stock is in order
For some webshops, this crisis time is comparable to a Black Friday or Cyber Monday, the peak days on which online sales are unprecedented. But, what is different from the well-known top sales days is that there are now more (unexpected) elements to take into account; the 1.5 meter distance we have to keep, including in the warehouse, or a stock that cannot be refilled due to the crisis. Such a sudden increase in demand therefore poses quite a few challenges where etailers have to try to keep waiting customers satisfied. The new purchase of products is a week-long process. And, to avoid long waiting times, many etailers are getting more creative with their distribution. Physical stores are often used as new distribution centers - an initiative that may also prove useful in the future for peak days.
Tips for more flexibility and optimal stock management
No webshop owner had the impact of the coronavirus on its annual marketing calendar; but it is clear how important it is to have your risk management on the agenda. Consider what you would do if your suppliers were unable to deliver? And don't just think about pandemic risks – but also the more well-known risks of a burglary, fire, or bankruptcy. It is not a good thing if your webshop is too dependent on third parties or you do not have a backup plan.
To build in more flexibility and know where your risks lie in the field of inventory management, it is smart to consider the following:
- Make an inventory of your suppliers: Make an inventory of how dependent you are on suppliers. Which suppliers provide which share of your stock? Do you have a backup for your main suppliers? You need this overview to be able to make a risk assessment. And immediately attach an important next step to this; do you also have a stable delivery partner? That is just as important as the suppliers of your products.
- Spread your risks: If it turns out that you are very dependent on one or more suppliers, it is useful to look for alternative suppliers. Basically, every step you take to reduce that dependence even slightly is important, as it allows you to spread out the risks.
- Flexibility is key: Work on the flexibility in your range, which means that you may have to expand your product offerings. But also consider the flexibility of your systems: make sure that you can easily adjust your webshop and product pages, for example, if necessary. This way, you can quickly set up a promotion, such as free shipping, to make it attractive for visitors to purchase a product. But you should also be able to easily display a message for website visitors in your webshop - for example, for package delivery delays. Also, be careful not to advertise products that you do not have sufficiently in stock.
Do you want to keep your customs matters in order in addition to your stock management?
As an entrepreneur, you will eventually experience setbacks. With catastrophes, these setbacks are often unexpected. Make sure you are prepared, have your stock management in order, and know what to do if a crisis occurs. Educating yourself, doing your homework, and planning ahead are all key to being prepared for a crisis. For that reason, is it perhaps also a good time for you to learn more about customs regulations? Start today by downloading our handy guide, with everything you need to know about customs.