How Does E-Commerce Inventory Work?

shoppingCart

One of the most frequently misunderstood aspects of e-commerce for the seller is inventory. Hopefully this post will help us all to understand this a little better.

Let me begin by stating that this is all based on first hand experience. Meaning that its all true, but there is a clear possibility that someone has figured out a better way to do it, and I am just unaware of it.

E-commerce inventory is just like shopping at your local food store (think Walmart, Albertsons, Acme, etc).

See the minion in the image above? Notice the Bananas in the cart with him? Those bananas can not be purchased by anyone except the person pushing that minion around. Someone took them off the shelf and put them in that cart – intending to checkout (or perhaps price them). As long as they are in the cart, no one else can purchase them, BUT – they have not yet left the building and certainly have not yet been paid for – so they are technically still the sellers.

This is how e-commerce shopping carts work. A visitor to your store grabs a cart and walks around, putting things in it. Every time the customer does this, the available count reduces. So that minion has 4 bananas in his cart, and there were 10 on the shelf. So the store has 6 left for the next customer, but still owns all 10.

Now what happens if the minions guardian comes around, grabs the little guy and leaves the store? Nothing. The bananas are still in the cart and can’t be purchased by anyone. That is until the store clerk notices an “abandoned cart”, grabs the bananas and puts them back on the shelf. Now, the shelf has 10 available, so the process can be repeated.

Again, that is how e-commerce works. When your customer leaves without buying, your inventory has decreased, but you have not sold it and no one can buy it. Not until your cart does a “basket cleanup”, and restocks those items.

So when does this “cleanup” occur? That is dependent on two things: First – do you have a timer on the baskets? My experience has been that this is set for about 60 minutes, although I have seen and used 24 hours. Some carts let you set this, some do not. Second – how much traffic does your site have? The timer mentioned above won’t actually restock unless the time has gone by, and a new visitor comes in to trigger that action. (there are ways to automate this part, but I have rarely seen that).

To understand this aspect, think about a meter reader. They walk around the parking areas and notice a car thats been there. They do nothing. The next time they notice the car is still there, and they note the time. At some point the car will be over the limit, but until the meter comes around again, no ticket will be issued. If the car gets moved (customer returns), the timer restarts. But also, if the meter reader quits for the day, the timer runs out – but nothing happens. Both the timer and the reader must interact for the restocking of your shelves to occur.

Orange Manager deals with inventory much differently. When you ship an order, the inventory related to those items is reduced. Orange Manager tells you what you have on hand. We are like the checkout stand – once that little minion gets pushed thru, the items in the cart are scanned, and the quantity reduced.

So what happens to your store when the customer checks out? The items they bought can not be restocked. Thats it. But remember, the fact they bought them does not mean you don’t still have them in your warehouse…

Hopefully this sheds light on things.

More than shipping simplified, it’s E-Commerce made easier.

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