MBA1795 Q&A Wednesday: How Do I Manage Inventory For My Small E-Commerce Store?

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Hey oh welcome to the Hunter. All our MBA show business problems solved every single day with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of Webinar Ninja, an independent software company I started with my partner back in 2014 and today's episode is Q and A Wednesday. On Q and A Wednesday, we answer a question from one of you, one of our listeners. If you have a question you want to ask just email me over at Omar MBA Net. Today's question is from Eddie and Eddie asks. Hey Omar, love the podcast. Just started listening recently. I'm trying to start my first business which is a e commerce store. I sell handcrafted clothing and accessories from my home. I'm a little bit worried about how I will manage my inventory, how do I make sure my customers don't buy a product I don't have in my garage? That's where I keep all my products. I'd love your help and insights. Sorry for the newbie question. Eddie. Eddie, there are no such thing as newbie questions or beginner questions. I am positive there are lots of listeners that have the same exact question as you and you by asking it are not only helping you in your own business but so many others so in today's episode, I'm going to answer Eddie's question. I used to have an e commerce business. It was one of my larger businesses that I had over a decade ago. I actually sold clothing myself and I started to sell that from my home with all my inventory. I later on had a warehouse and a second, then a third and distribution centers. But I know that worry that Eddie has. When you're starting out, you want to make sure that if you're sold out, your website says it's sold out and if you do have inventory, your site or your e commerce store is keeping track of it. So how does that all happen? Well, I'm going to explain to you how it works and give you my straight up, just do this advice, okay? Because I've seen a lot of different ways to do e commerce and I'm going to tell you the easiest way to do this, to manage your inventory. So let's get into it. Let's get down to business.

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First of all, congrats Eddie and everybody else who's listening, who's starting a business, starting a new e commerce store. There's something special about selling physical goods. I know this for a fact. Like I mentioned, I had my own e commerce store. And there's just something nice about seeing people in the wild, real people in the world, you know, using, wearing, enjoying the products you sell in real life. I remember the first time I met somebody that bought one of my shirts that I was selling in my e commerce store and I noticed across the restaurant somebody was wearing it. And I just felt so proud inside. This person is going out to dinner and wearing my shirt. I felt kind of useful, like I'm, I'm contributing to society or at least contributing to this person's life. So first of all, congrats. It's a fun business, but it does have a lot of moving parts. One of them is inventory. Especially, you know, Eddie's concern in her question today, how does she manage inventory to make sure that when somebody orders something that they don't actually buy and order something that she doesn't have and you know, she's getting started and she's managing her inventory in her garage, which is totally normal. And lots of people do this. So I'm going to give you the straight up easy answer. I've explored so many different kind of ecommerce solutions out there in the world. I had custom built solutions, I've used off the shelf solutions, I've piecemealed solutions together. And here's the bottom line. If you're starting out and you're selling for the first time and you don't have a website, you don't have an e commerce store yet, I highly recommend, and this is always my recommendation for e commerce stores is to use Shopify. Yes, you can build your own with a theme with WordPress or go Squarespace or something like that. But the bottom line is that Shopify is just the best when it comes to E commerce. It's just going to make your life easier. It's just easier. And the prices are really marginal for what you're getting. They're all kind of the same. And Shopify has really focused on creating a great e commerce business solution. So if you're selling any kind of physical products online, then Shopify is really the way to go in my opinion. Now one of the features that Shopify has is a way to manage your inventory. And you can do this several ways. You can just manually manage it and enter the numbers or you can actually upload a spreadsheet. Now how does this work whether you do it manually or with a spreadsheet? Well, you just manage your inventory yourself. Meaning that let's say you go into your garage and you say, okay, I have five of this shirt in this color and this size and I have three shirts in this color and this size. And I have this scarf, I have four units of the scarf and I have have 10 units of this bracelet. And you literally just take inventory physically with a spreadsheet on your computer or on your phone. And you can use like Google Sheets or Excel or whatever and then you just go ahead and upload that spreadsheet to Shopify. And Shopify now knows what's in your garage now. Yes, you can also manually just put in the inventory or write, you know, scarf, three units, you know, bracelets, 10 units. You could do that as well. If you don't want to go the spreadsheet route or you don't like spreadsheets. It's okay. The point Here is that now Shopify knows what's in your garage, the inventory you have for each item. So now when a customer buys an item, let's say they buy one of those bracelets, it automatically says your inventory went from 10 to 9. And your job at that point is to make sure you ship out that product to the customer so it's not in your garage anymore and it's in the customer's hands. Now Shopify also integrates with, you know, the common couriers like FedEx and DHL and UPS and all that kind of stuff, and will print labels so that you can just stick a label on your product or put it in a box and stick a label and just get it picked up or you send it via that service. So they make it really, really simple. In fact, people that run E Commerce stores, they don't do this piecemeal. They don't do it one by one. They actually just do their pick and packing and shipping at the same time every day. And that's why you'll see site says, hey, if you order before this time, you'll get it by this time. Because they know that, hey, every day at 3pm I go to my Shopify store, I get my list of all the items that got ordered in the last 24 hours. They might print it, take that piece of paper, go to their warehouse or go to their garage and say, okay, I have one order with this. Put this box and fill up the things that says in this order. And I do this, this, this, and automatically Shopify will update your inventory, of course, like we mentioned. And then you have your bunch of orders. You take that to the post office or take that to ups or you can have, you know, those shipping companies come to your door in some places. That works in most places in the U.S. i know that that's an option. And they just pick up your packages and they get shipped out. You already have a label that got printed out from Shopify, like I mentioned, that's integrated with your shipping provider and you're done. Your inventory is up to date, your product has been ordered by the customer and you got paid and you shipped it out. Now, what's great about this system is eventually your business is going to start growing. You're going to get busier and busier. You're going to have more and more orders and you're not going to be able to do this just once a day because it's going to take you maybe even more than an hour or two to do that whole system. So now because you have this system, you can hire somebody even part time to take care of this for you. Which means no matter what happens, if you go on vacation for a month, you have somebody that is taking care of all your orders. This is why a lot of E commerce owners, they put their inventory in self storage instead of their own home one because their significant other, their families probably like hey, I want my garage back or they want to separate their inventory from the house because then they can hire out, they can give somebody, you know, the passcode to their self storage or the key and with a phone or a laptop they can see the orders that they have to fulfill. They've Philip and they can do it without you and you could be on a cruise ship or something. The point here is that systems like Shopify make this possible. Now what's great about this is that Shopify is going to show you when inventory is low and it's going to tell you what your best sellers are and which ones have been sold today or which ones are selling fast. And therefore you know how to restock your inventory accordingly and with some heads up, meaning you can probably get ahead of the game and make sure you're never out of stock if you know the timing of how long it takes for you to replenish your inventory. Now I do want to mention what do you do once you get out of this self management stage? What do you do where you're not working out of your garage or your self storage unit and your orders are moving so fast you need somebody full time to take care of it for you?

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So let's say you outgrow your garage or your self storage unit and you actually need some full time help and maybe even a larger warehouse to store your physical products for your site. Well, there's a lot of services out there that actually will solve this problem. They're called pick and pack services where you literally send all your inventory to one location. They will receive it, they will stock it, they will store it for you. When you get an order, it will automatically go to their system and they will pick the items that is in the order, pack it for you and send it to the customer. I know this sounds like magic. I know it did to me when I first heard about it, so. But it's actually a really cool system and quite affordable. I mean, when I had my ecommerce store over 10 years ago, it wasn't this affordable. It was probably four times as much money as it costs. Now. There's a lot of different providers, but one that in particular I think is pretty cool is called Shipbob and they have a direct integration with Shopify. So they actually integrate with your store. So when you get an order, they know and they can fulfill your order for you. You can check them out@shipbop.com they're not sponsoring this podcast episode or anything like that. I just know about them. You can check out their prices. A lot of these fulfillment companies that do pick and packing, they have some really good deals with shipping companies that can get you a discounted rate and they pass on those savings to you so you don't have to negotiate any kind of shipping rates with UPS or FedEx. I highly recommend a lot of people to look at this option even if you're working out of your garage right now because it might end up being more affordable than you think. It might be even more affordable than hiring somebody part time to fulfill your orders. And you can just always incorporate the cost of this into your shipping or your product prices. And I remember I did this with a fulfillment company and this kind of saved me so much headaches and it allowed me to focus more on my products and my customers and my marketing and it allowed me to really expand quickly and fulfill more inventory and fulfill more product for my customers. Guys, that wraps up today's Q and A Wednesdays question. Eddie, I hope that answers your question and thank you so much for asking today's question. Great, great topic. If you have a question you want to ask, just email me over at omar100.mba.net don't forget to smash that subscribe button and get our next episodes automatically. Remember, we're five days a week and we don't want you to miss a beat. So subscribe on whatever app you like to use to listen to podcasts. Before I go, I want to leave you with this quick note. If you have items that will not live long, that are perishable or will may not be delivered to the customer in the same condition. If it's not sold quickly, then be mindful of your pick and pack options. Make sure the warehouses are air conditioned, most of them are climate controlled. And be aware of your inventory. If you need to get rid of some inventory quickly or put it on sale, put it on clearance. I even had to do this with clothing because I noticed that if you keep clothing in storage for too long, it's just not going to feel the same when you get it delivered to the customer and they open it up for the first time. Also, when you're choosing your fulfillment center where they pick and pack it, find out what they do about returns. Most of them will handle returns for you. So if customer is returning their product, they return it back to that fulfillment center and you have to give specific instructions to the customer how they were supposed to return it in the packaging, again with the tags, with the SKUs, all that kind of stuff so that the fulfillment center can restock it in your inventory. Thanks so much for listening and I'll check you in tomorrow's episode. I'll see you then. Take care.

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