How to manage the quality of products?

Managing product quality is crucial regardless of your sourcing method. 

Tyler Rybacki, a product development expert at subscription coffee company Jot, says, “Product samples enable you to inspect the level of quality so that you can ensure every order is worth your investment. Having a sample on hand is also helpful for shooting product photos for sales and marketing materials and your e-commerce website.” 

• With dropshipping, thoroughly research and vet suppliers, request product samples and monitor customer feedback closely to ensure quality. 
• For wholesale sourcing, inspect a sample batch before large orders, establish clear quality standards with suppliers, and conduct regular quality checks on received inventory. 

• When working with manufacturers, be deeply involved in the product development process, create detailed specifications, and implement a rigorous quality control system. This may include on-site inspections, third-party quality audits, and testing of materials and finished products. 

‍

Across all methods, maintain open communication with suppliers, address quality issues promptly, and continuously gather and act on customer feedback. 

Remember, consistency in quality control processes is key to maintaining your brand's reputation and customer satisfaction.

If you want a simple checklist for sourcing good products, we have one ready for you here. 

‍

Inventory Management

Now that you have identified who to source the products from, the next step is managing the inventory. Inventory management is the process of tracking stock levels for your e-commerce store, to fulfill orders for your customers. 

Depending upon your sourcing method you need to be prepared for: 

• Ensuring the raw materials reach the manufacturer
• Receiving the products from the wholesalers

‍

To ensure accurate inventory management, you need to be prepared for: 

1. Data-Driven Demand Forecasting:

Advanced analytics and machine learning algorithms can help predict your future customer demand with greater accuracy. With data sources like historical sales, seasonal trends, economic indicators, or even social listening, you are able to ensure precise inventory planning. 

‍

2. Real-Time Inventory Tracking and IoT Integration:

Inventory Management System (IMS) that leverages Internet of Things (IoT) devices like RFID tags and sensors can help in real-time tracking of stock levels, product movements, and even environmental conditions (e.g., if you need the perfect temperature for a chocolate product in your e-commerce store). With access to this data across multiple locations, you can ensure better decision-making across locations and products. 

‍

3. Lean Inventory and Just-in-Time (JIT) Principles:

With lean inventory practices and JIT inventory management you can closely coordinate with suppliers to receive goods only when needed for production or sales. However, the only caveat is that you need a highly reliable supply chain and accurate demand forecasting to be effective.

‍

4. Dynamic Safety Stock and Reorder Point Optimization:

Implement dynamic models that continuously adjust safety stock levels and reorder points based on real-time data, based on factors such as demand variability, lead time uncertainty, and desired service levels. Use statistical methods like Monte Carlo simulations to determine optimal levels, ensuring high product availability without excessive inventory costs.

Check out this GitHub repository that works with any CSV file as input. Just export the “closed dates” of your items into a CSV, feed the script with it, and your simulations can be run. You could even start building your tool based on the existing code.

‍

5. Strategic Supplier Relationship Management:

Most e-commerce store owners stay focussed on the data, but not on the people. Remember that having a good relationship with your vendor/manufacturer could solve half your problems; since they would be eager to see you succeed. 

Here’s what you could focus on: 

•    Collaborative forecasting and planning with key suppliers
•    Vendor-managed inventory (VMI) programs for critical items
•    Regular performance evaluations and improvement initiatives
•    Risk management strategies to mitigate supply chain disruptions

‍

6. Reverse Logistics and Returns Management:

The total return rate for 2023 was 14.5%. E-commerce categories like clothing (23%), bags, accessories, and shoes (18%) and food and beverages (13%) experience the most amount of returns. If you have an e-commerce store in any of these categories, make sure to include: 

•    Clear return policies and easy-to-use return systems for customers
•    Quick processing and restocking of returned items
•    Data analysis of return reasons to improve product quality and reduce future returns

‍

Shopify’s Inventory

As a first-time Shopify e-commerce store owner, you might find all of this overwhelming. But Shopify again comes to help. 

Shopify’s Inventory area allows you to track and adjust inventory information (and a full history) for up to 90 days. However, as an ad-hoc tool, it comes with its own set of limitations, which is where Inventory Management apps come in.

Here is what makes them so indispensable:

• Real-Time Stock Updates: Helps you figure out what’s available and what’s running low.
• Automated Alerts: Send you reminders for reordering, preventing stockouts, etc. 
• Multi-Location Management: Helps you track and manage inventory across all locations with ease.
• Detailed Reporting and Analytics: Helps create inventory trends and make smarter decisions based on solid data.
• Order Management: Manages customer orders efficiently, from tracking to fulfillment, with real-time updates.
• Barcode Scanning: Speeds up stock checks and updates with barcode scanning and minimizes manual errors. 
• Stock Transfers: Helps you move stock between locations to ensure optimal inventory levels wherever you need them.

‍