Monday, November 4, 2013

The Importance of Inventory Management in Customer Retention & Satisfaction

Keeping your customers happy is the most important facet of any business, and inventory management is critical to that customer satisfaction in many ways. Obtaining and retaining their trust is a must if you want to keep them happy, and we all know that getting a current customer to buy again is much cheaper and easier than attempting to acquire new customers.

If your existing customers aren’t pleased with your service, they obviously won’t be buying again; that same word of mouth that can bolster your reputation and sales can just as easily become detrimental if that customer becomes displeased. A good CRM, inventory system, and shipping platform are essential to keeping your customers happy.

How Fast Can you Pick, Pack and Ship?

Fulfillment time is a significant component of customer satisfaction. In the online retailer industry, current shopper expectation dictates that orders go out same-day, or, at the worst, next-day. Every time a customer receives an email within the first few hours of purchase indicating that their item has shipped, this inspires in the customer confidence in the seller. An inventory system optimizes the order to fulfillment time; Pick lists see that the products are picked faster, Quality Control verifies the right items are being sent out on the order, and a good shipping platform ensures the best and correct carrier and shipping methods are used.

Out of Stocks are Horrible

The worst thing about an out of stock, AKA stock out, AKA oversell, isn’t the inconvenience (although that part is awful too) – it’s the blow that it deals to your customer’s trust in your company. Have you ever ordered something online, only to get an email stating that your product is out of stock? Or, worse, received that email a few days after you’ve made your purchase? Likely you’ve permanently lost a customer, and incurred some negative word of mouth as well. If you sell on online marketplaces, you’re in a unique position to be completely and utterly aware how bad feedback is not only viewable by potential customers but also hurts your search result rankings and therefore reduces sales and bottom line. The number one function of any good inventory management is to ensure that the quantities on your marketplaces reflect the true available quantities in your warehouse, which, obviously, goes a long way toward eliminating out of stocks.

Inventory Management Affects Overall Costs

Do you know what your turn is? How long are you holding inventory instead of selling it? Are you selling out of season items because you bought too much? Do you know what product categories have the highest average margin? These are questions that sellers need to be able to answer, as those answers can be utilized to make better decisions. The right reporting and data can help lower overall costs, which allows you to keep your product prices down - and that makes your customers happy. Advanced reporting like this can also allow you to see trends and make better purchasing decisions, which ultimately benefits your customer as well.


Back end operations directly affect customer satisfaction. Inventory management in ecommerce is also much closer to customer interaction than traditional inventory systems in the past. In eCommerce we see that everyone in the world needs to be able to know what you have in stock. The idea is that you can share inventory across all of your channels. The ability to reflect quantities across your channels according to what is actually happening in your warehouse is essential to customer service and satisfaction. An eCommerce Inventory and Warehouse Management System can help keep your customers happy by improving how your back end operations serve your customers.


Andy Eastes is the CEO of Agile Harbor. He’s been active in the eCommerce community for 10 years, and has a passion for increasing efficiency for eCommerce and wholesale businesses. Agile Harbor’s latest venture, SkuVault Warehouse and Inventory Management System integrates with ChannelAdvisor, ShipWorks, and Shopify to reduce out of stock percentage, simplify inventory, and free labor hours.