Inventory Management and the Customer Experience 

Creating a stand-out customer experience goes beyond great marketing and customer service. Small businesses that want to improve customer loyalty also need to meet expectations when it comes to ordering and fulfillment. Unfortunately, many small businesses struggle with inventory management problems that leave their sales lacking and their customers disappointed.

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3 Inventory Management Mistakes That Hurt Small Businesses

Running Out of Stock

You can’t sell a product that’s not on the shelf. When a business runs out of stock, one in three shoppers will abandon their purchase or shop elsewhere. Even the occasional stockout hurts a business’s bottom line, but when stockouts become a chronic issue, it’s disastrous. By the third time that a customer encounters a stockout, the odds of a lost sale skyrocket to 70 percent.

Stockouts, or out-of-stocks (OOS), happen for a variety of reasons:

  • Lack of demand forecasting.
  • Failure to reorder and restock inventory in a timely manner.
  • Inaccurate inventory data due to errors or shrinkage.

However, keep in mind that stockpiling isn’t the solution. Warehouse space is expensive, and overstocking leads to problems with shrinkage due to damaged, expired, or obsolete stock.


Overselling adds another layer of frustration to the customer experience. When a business oversells a product, they take payment for an item that they don’t have in stock. Primarily an issue for e-commerce merchants, especially those who sell on multiple channels, overselling has a serious impact on customer satisfaction.

Overselling happens due to:

  • Decentralized inventory management.
  • Outdated inventory data.
  • Inaccurate inventory data due to errors or shrinkage.

Slow Order Fulfillment

It’s not just the ability to fulfill an order that matters; it’s also the speed at which you do it. Nearly 73 percent of customers report they’re unlikely to make a repeat purchase after a poor delivery experience. While not all delivery delays are unavoidable, if order picking is a bottleneck for your business, it’s critical to do something about it.

Order picking delays are typically caused by:

  • Disorganized warehouses.
  • Mis-picked items.
  • Labor-intensive picking processes.

Improving Inventory Management

Inventory problems can cause irreparable damage to a company’s reputation. Before that happens, small business owners should improve their inventory management system. The biggest mistake is relying on manual inventory counts. Not only are manual methods highly error-prone, but they’re also time-consuming, adding to labor costs and extending the time it takes to fulfill orders. A barcode system is an affordable step up from manual tracking that allows for fast, accurate counts when paired with the right software.

As for software, businesses should opt for cloud-based applications or modules that update in real time across multiple locations and channels. With data constantly updating as inventory is received and sold, businesses no longer have to worry about selling items they don’t have or running out of stock without noticing. To really improve the customer experience, multi-channel retailers should choose software that allows shoppers to look online to see which products are in stock locally.

With a more efficient inventory system, businesses can afford to perform regular cycle counts rather than shutting down for an inventory audit once per year. With frequent counts, businesses can identify and solve shrinkage problems before they impact the customer experience.

Software also improves a business’s ability to forecast demand. With past sales data readily available, companies can predict future sales trends and adjust inventory levels accordingly.

Last but not least, get shift scheduling software to help everyone stay on the same page. These packages allow you to create schedules for your employees whether you’re in the office or on the go. Most importantly, you can send real-time alerts regarding schedule changes in the event that you need additional coverage to manage any inventory issues.

Upgrading to a barcode inventory system isn’t just good for customer satisfaction; it’s also a smart move for a business’s bottom line. In addition to improving the customer experience, automated inventory management requires far less time and expense than manual methods. Compared to the high cost of chronic inventory problems, adopting these inventory management practices is a no-brainer.

Image via Unsplash


Marcus Lansky
Founder, Abilitator.biz

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