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How Much Stock Do I Need for My Online Store?

Jul 4, 2020

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When I was beginning my first online store I wasn’t really sure how much store I would need. I tried to do some math but still wasn’t sure. So, after much trial and error, and research I thought I’d put together this helpful article to explain it.

So, how much stock do I need for my online store? You should start with the smallest amount you can. You need to know how to put an ‘out of stock’ notification on items you are selling. That way once you sell out you can put a notification on the listing. Some products are seasonal and you should be wary of acquiring too much stock.

There are many areas to look at when predicting how much stock you need if your website is selling a lot of units in a day. So, below I will discuss more about why you should start small in the beginning and how to forecast once you have consistent sales.

Keep reading to find out more about how much inventory you should have for your online store. And when you’re done, check out this article which has a list of 50 items you can sell online from home.

How many products should I have for my online store?

In the beginning you should start small. Only buying one or two of each item. There is no minimum amount of products you can sell.

Many websites sell only one product and make a lot of money. So, you should start with only a few. Otherwise, you will buy a lot of product and you might not be able to sell it. When this happens you will have to lower the price. Then you might not make any money.

After you are making regular sales as a result of your marketing activities you should look into the following factors to determine how much inventory to carry.

Bulk orders

You should find out how many products you think you could sell based on your recent sales data. About one month or more should be reasonably accurate. But, you want to err on the side of caution. When buying in bulk orders you get a discount. This discount is because you are taking some risk by holding a large amount of stock.

If you buy in smaller quantities you will be charged more, but you have to order more often. It also is good because if sales suddenly stop you aren’t left out. Like in a game of musical chairs.

Some products are very unique and fall into the boutique arena. Often these are made custom to order or in limited supply so you may not have the option to buy in bulk.

Guidelines for acquiring more stock

Below are some guidelines to do really well at getting the right amount of stock for your store.

Track your numbers daily.

You should have a routine about checking your stock levels. This will make sure you have your finger on the pulse of your business. When you track your numbers using your payment provider or an accounting software you can set targets and adjust your activities.

This way you are flexible to the demands of your business. When you get sales through Paypal or the payment processor you are using you can generate a report on how many sales you made in a week, month, quarterly, and yearly.

Over time, you will get a very clear picture of how much stock you should order. As well as, when you’re going to have a busy period.

Keep an eye out for trends

Some products are seasonal, and nearly every product based business does well over Christmas, and major public holidays. You can also read informational and business articles that do industry specific research in your industry. Some provide excellent statistics of previous years sales volumes.

If your product is related to the outdoors you will see spikes in sales during certain seasons. For example most hikers might only hike in the summer. So hiking gear would see an increase in sales in Spring. When the weather starts to get nicer and people think about going hiking again.

How do I get a dropshipping supplier?

We have compiled a list of dropshipping suppliers from an article by BigCommerce.

You could drop it all and do drop shipping. A fantastic option. Below I will discuss how to start dropshipping products, because with dropshipping you don’t need to worry about carrying any inventory.

How does dropshipping work?

Dropshipping is where you partner with a supplier. The supplier is special in that they hold all the stock. When you make a sale on your website you take a profit, and then order the item from the dropshipper. The dropshipper will use all your branding on the product.

The person who buys the product directly from you is unaware that it has gone through a dropshipper. This is a key strategy in sourcing local suppliers for products when doing business internationally.

How should I select a dropshipping supplier?

There are three main phases of selecting a dropshipping supplier.

Indepth Research

You should consider your niche and think about branching out in other niches that appear to be good. Most people write out many niches that they are interested in and then come up with a shorter list of ones they like the most.

Then you can search the directories I listed above for products your niche would like.

Contact the suppliers

Talk with the suppliers that you identified and see how they feel as a business partner. If you put a good foot forward they will mirror what you do. So, if you treat them as important they will treat you as important.

If you have talked with your supplier and are happy with them, then you should go onto the next step.

Get some samples

You should order some sample products from them. As part of your research you should have some top suppliers you think would be good. Now, you should order some products from them.

As part of the process evaluate how easy they are to use. You should also observe delivery times, to see if their products arrive pretty quick. Also see what the packaging and labelling looks like.

Begin marketing. From there you can go ahead and begin marketing your products to bring in sales.

As a final note I have included some tips and warning signs to watch out for with dropshipping suppliers.

What dropshipping suppliers should you avoid?

What out for pre-order fees. Some dropshipping suppliers will charge pre-order fees. These aren’t necessary. You can find suppliers who don’t charge pre-order fees and the quality or products and services are the same. Therefore, they should be avoided.

You will find it fairly obvious once you look through the different suppliers. Many products do better if you can source them without having to sign up for a subscription. Aliexpress.com has many small items that can be sold for more, the only limitation is your marketing.

A final note, you can use the website you are on now to sell your products. I am offering free listings, you should definitely create an account. To do this go to the register an account page which can be accessed by clicking here.

In Conclusion

To know how much stock you need you should look at previous sales data. The longer timeframe that you look at the better. For example, 2 years of data is better than 6 months.

Therefore, you should track your sales data to make the best prediction of how much inventory you will need. There is also the option to drop ship. Dropshipping is where you buy the item after your customer has bought it. Which means you don’t need to carry any inventory.

Would you like to learn 100 ways to make money from home check out this article.

If you want to start selling free of charge try Sheepbuy.