Inventory management strategies for e-commerce success in Indonesia

The digital marketplace is rapidly evolving, reshaping how businesses operate and interact with consumers globally. E-commerce, in particular, has revolutionised the retail sector, enabling businesses to extend their reach beyond conventional geographical limits. 

This shift toward digital commerce is especially evident in Indonesia, with e-commerce transactions in the country having projected to reach an impressive Rp 533 trillion (US$34.41 billion) in 2023, the highest in the ASEAN region. Such substantial revenue spotlights a significant growth opportunity for e-commerce businesses in Indonesia. 

However, to fully leverage this potential, these businesses in Indonesia must implement effective e-commerce inventory management strategies. Read on to learn more about how to manage your inventory effectively.

What is inventory management in the supply chain?

Inventory management is the process of overseeing and controlling the ordering, storage, and use of products and materials. It involves tracking inventory levels, managing stock replenishment, and ensuring that the right products are available at the right time.

Why inventory management is important in the supply chain?

Effective inventory management ensures businesses always have the right stock levels, which is fundamental to the efficiency of supply chain management in e-commerce. By balancing supply with demand, businesses can avoid overstocking or shortages, keeping operations streamlined and customers satisfied.

How to improve inventory management for your e-commerce business

Here’s how to manage inventory effectively for smooth e-commerce operations:

1. Establish inventory-receiving procedures

When new stock arrives from your suppliers, you must check each item carefully against the purchase order. This helps confirm that what you received matches what you ordered, both in quantity and quality. 

Next, update your online inventory management system immediately to ensure your stock levels reflect these additions. This immediate check and update process helps avoid issues like missing items or overstocking.

2. Implement inventory storage solutions

After conducting quality checks, swiftly organise and store products, especially perishables that require immediate attention. Utilise temperature-controlled areas and secure locations for sensitive items. If space constraints arise, consider renting additional warehouse or storage facilities. 

Alternatively, explore warehouse fulfilment services like those offered by DHL Express, which provide comprehensive solutions for e-commerce inventory management. These services include optimised storage conditions and streamlined order processing, ensuring your products are well-maintained and readily accessible for both domestic and international shipping.

3. Do an inventory forecast

Use ABC inventory classification to sort products based on how quickly they sell and their importance to your sales. This method helps you focus on keeping the right products in stock. 

Your inventory management methods can also change depending on whether you’re dealing with fast or slow-moving products.

• Fast-moving products: These require close monitoring and frequent reordering to prevent stockouts. Consider setting up automated reorder points based on sales velocity and lead time. It's also crucial to maintain strong relationships with suppliers to ensure timely deliveries.
• Slow-moving products: Regularly assess these items to identify potential for price adjustments, promotions, or even discontinuation to avoid excess inventory and storage costs.

Understanding these elements helps you reorder products at the right time, ensuring you always have what your customers need without overstocking.

4. Conduct regular audits for inventory

Regular audits are vital to ensure the accuracy of your inventory records. You can start by implementing cycle counting, which allows you to regularly count parts of your inventory without needing a full audit. This method keeps your inventory data up-to-date and helps identify discrepancies early. 

For more comprehensive oversight, integrate an e-commerce inventory management software to automate inventory tracking, reduce human error, and help maintain optimal stock levels.

Benefits of inventory management

Learn more about the various advantages of optimal e-commerce inventory management:

• Improved cash flow: Effective e-commerce inventory management ensures that capital is not tied up unnecessarily in excess stock. This frees up resources for other critical investments and operations, making the business more agile and responsive to market changes.
• Enhanced customer satisfaction: Managing inventory effectively ensures that products are available when customers need them, leading to quicker delivery times and fewer backorders, thereby increasing customer trust and satisfaction.
• Reduced operational costs: Optimised inventory control enables businesses to avoid unnecessary purchasing, decreases the risks of stock spoilage, and reduces capital tied up in excess stock, leading to lower operational costs.
• Increased efficiency in operations: Online inventory management systems streamline various aspects of supply chain operations, from ordering to stock replenishment. This increased efficiency reduces the time and labour involved in manual inventory checks and updates, allowing staff to focus on other productive activities.
• Better data insights and decision-making: With advanced e-commerce inventory management software and tools, businesses gain valuable insights into sales trends and customer preferences. This data is critical for making informed decisions about stock levels, new product introductions, and promotional strategies, leading to more targeted and effective business practices.
• Preparedness for sudden demand spikes: Proper e-commerce inventory management equips businesses to handle sudden increases in demand effectively, ensuring they are ready for promotions or peak seasons that may necessitate quick services like same-day or next-day delivery.

Partner with DHL Express to improve your supply chain

To take your e-commerce operations global, work with a reliable international courier service provider in Indonesia to ensure your inventory management efforts translate into timely customer deliveries. DHL Express, a leader in logistics and supply chain management, offers international express services that cater specifically to the needs of rapidly expanding e-commerce businesses. 

With our on-demand delivery solutions, we ensure timely and efficient management of your shipments, supporting your growth and helping you meet consumer expectations globally. By integrating DHL Express’s expertise into your supply chain strategy, you can enhance operational efficiencies and seize international market opportunities.

Ensure your goods reach customers swiftly and reliably—open a business account with DHL Express Indonesia today and elevate your shipping strategy with our supply chain and logistics solutions.