Inventory Management techniques in eBay

The right inventory management techniques vary from business to business. What works for one may not work for another. Businesses of different sizes or with different inventory sizes will need to adopt different approaches to ensure they operate at maximum efficiency.

A properly organised inventory is a vital aspect of your supply chain management. Without implementation of effective eBay inventory management techniques, your business will likely be hindered by a range of errors related to shipping, stock levels, etc.

The Most Common eBay Inventory Management Techniques

There are many ways that eBay sellers handle inventory management. Depending on the size and scale of the business, certain options may seem like a more logical choice. The following four techniques are suited to a wide range of eBay businesses and can help streamline the supply chain and boost productivity.

Backordering in eBay

In simple terms, backordering is the act of selling inventory that you don't actually have in stock. This happens when a customer orders an item that's not yet available or out of stock. Initially, this may seem great as it's an indicator that things are going well for your business; however, it can be problematic if not handled appropriately.

If you're a small seller on eBay, it may not be in your best interests to purchase more stock and risk overstocking, especially if it's a low-selling product in the first place. That's where backordering comes in. This generally means a longer wait for your customer as you'll have to wait from the product from your supplier.

For larger businesses, frequent backordering can be a sign of poor inventory management. As such, it may be time to consider improving eBay inventory management techniques and investing in an inventory management system.

Consignment in eBay

This kind of eBay management technique can be handy for businesses that are just starting out as not having to pay for the goods up front can provide the perfect stepping stone into eBay trading. Paying for the goods when they actually sell can help eBay sellers to get established in their niche.

As eBay sellers won't pay the cost of their inventory on an upfront basis, they can benefit from an improved cash flow. Sellers that use this form of eBay inventory management technique tend to gravitate to it as it's low risk. Consignment means they don't have to worry about selling-out or wasting money on goods that won't sell.

Bulk Shipping in eBay

Bulk shipping is arguably the most popular of the eBay inventory techniques. This method involves buying and shipping goods in bulk rather than small numbers. While this can save money for small sellers who are operating out of a room at their home, for bigger sellers it will entail extra expenditure on warehousing. Which in turn is likely to offset money saved from bulk shipping.

However, reducing the likelihood of being out of stock can help you to make a good impression on customers when you're able to fulfill their orders. This eBay inventory management technique is most suitable for businesses with products that are consistent sellers with a predictable demand and relatively long shelf lives.

The major risk of bulk shipping is the upfront investment. If demand for products fluctuate, which is likely that it will, sellers can be left with huge amounts of stock just laying around taking up space.

Dropshipping in eBay

Dropshipping can provide the perfect means of starting an online business. Products are provided to buyers without the sellers actually having the items in stock themselves. What happens instead is that the store will purchase the item from a third party or from the supplier and have it shipped directly to the customer.

This is a simple method of inventory management when sellers are in the initial phases of their business. However, as things slowly grow and the number of sales pick up, it can be challenging to manage inventory.

The main benefit of dropshipping in eBay is that there's no need for a seller to have possession of the products that they're intending to sell before they are listed for sale. This can of course go wrong for sellers, so they should always make an effort to ensure that their suppliers have the necessary items in stock before they take on the orders.