Excel Inventory Management: How With Better Alternatives
Many eCommerce businesses began with minor operations and low inventory needs. Maybe they started using Excel spreadsheets to track their stock, but eventually, they will outgrow the limitations of this approach.
To experience long-term growth, it needs to automate its supply chain and inventory management. An integrated software system that allows you to track sales channel inventories in real-time is one of the essential tools for automating your list.
One of the many limitations found in Excel is how it does not allow for real-time inventory management. As a result, managers cannot see an accurate picture of what their store has on hand and must rely on estimates, leading to inaccurate forecasts.
How to Make An Excel Inventory Management System
Excel spreadsheets are a good option for small business owners who want to keep track of their inventory. To use Excel, you’ll need to learn how the program works and get used to entering your products manually.
1. Make a spreadsheet
To manage your inventory in Microsoft Excel, begin by creating a new spreadsheet. Open Excel and select the option to create a blank workbook or press Ctrl + N for an empty sheet of paper. Next, input all relevant information into the cells on this new document.
2. Add any needed categories of the product as columns
If you are looking to organize your inventory list, the best way is by adding a tab with Product information. The Products table can be used as columns to help track product performance and profitability individually.
3. Add every product that you have to the spreadsheet
Next, you can categorize each outcome by its type. How detailed this process depends on your preferences, but it’s helpful to include the name of the item and what price they are listed at. Other information that should be included for products would be their inventory quantity or value and where they’re located in storage.
4. Adjust each quantity as you make your sales
Even though you have entered all the necessary product details, it is a good idea to maintain your spreadsheet on an ongoing basis.
Staying on top of your inventory counts is essential to avoid any delays in the supply chain and possible inaccuracies.
Drawbacks of Inventory Excel Spreadsheet
We’re not here to disparage Excel spreadsheets; they are a valuable tool for helping companies, especially those in startup mode or with access to fewer resources. However, as you scale your operations and expand into the next level of business complexity (for example, inventory management), it will be necessary to use more advanced tools.
When your eCommerce business is booming, it’s hard to find time in the day for mundane tasks like updating spreadsheets or manually tracking inventory. When you do this thing on Excel, they quickly become limited and limiting.
Here are three reasons why this is the case.
1. Time-consuming process
Updating inventory spreadsheets is time-consuming and requires a lot of tedious work. More specifically, inputting data into the spreadsheet takes considerable time, as does all the other things that go along with it, such as merging sheets or reviewing information.
Spreadsheets are an easy way to deal with a few numbers, but adding new SKUs to your inventory list becomes more challenging. It’s not worth the time and effort of having people spend all day inputting data into spreadsheets; ideally, they should be focusing on profitable activities that will bring added value to your business.
2. Lack of real-time reporting and automation
Most people use formulas, pivot tables, and conditional formatting to automate tasks and calculations within their Excel inventory management template. However, these features prove pretty useless if you need to update inventory counts across multiple sales channels or make changes as stocks are depleted. Spreadsheets can’t handle those types of scenarios.
Spreadsheets lack the sophistication to track data and inventory as it happens, which will inhibit your company from making timely decisions.
3. Greater chance for errors
The average data entry error rate is one in 300. This means that an experienced, well-trained manual worker will still make mistakes on occasion, and it can be costly because each mistake impacts your bottom line.
If you want your eCommerce business to succeed, then the cost of making these mistakes will hold it back. Manual data entry is a massive problem for companies with multiple channels because getting information from each channel into scattered spreadsheets can be an insurmountable challenge.
With so many touchpoints within your supply chain, you need to be careful of errors. This includes supplier deliveries and order routing.
Inventory Management Software vs. Excel Inventory Management
As your business grows, you will need to ensure that inventory management software is in place. You cannot rely on Excel spreadsheets anymore because they are not scalable and don’t offer the same capabilities as more advanced programs like Skubana, which can help manage all aspects of eCommerce operations.
Below are five key advantages of using inventory management software over Excel spreadsheets, as detailed below.
1. Automation and time savings
Spreadsheets are a great way to manage your inventory, but they become much less efficient as you grow and have more stock. Inventory management software is the perfect solution because it makes entering data quick and easy with barcode scanners or other tracking tools.
Automations also significantly affect scalability by allowing you to process both purchase orders and customer orders in much less time. In addition, advanced inventory management systems automate the replenishment process, which allows for quicker ordering of goods.
Automating processes will make your team more productive because they’ll have time to spend on front-end growth rather than back-end logistics.
2. Multichannel coordination
The essential part of business growth is successfully navigating economies of scale. The more sales channels you have, the more helpful inventory management software becomes to help coordinate information across all segments.
Integrating the system with your existing management solutions makes it easier to track orders and pricing. If an order is purchased, you’ll be able to see where they’re fulfilled as well.
3. Greater visibility of inventory
Excel spreadsheets are not the best tool for analyzing inventory data. It is difficult to see what’s happening with them, and even when you do, it can be challenging because they have so many limitations.
On the other hand, inventory management software has various features that will help you monitor what is happening with your sales channels and warehouses. This way, it’s easy to see exactly how things are going.
Understanding your product’s demand is crucial for developing a production strategy. This means knowing what items are being bought, by whom and in which locations.
It’s easier to see the big picture when you can access all of your data in one place. You will analyze how well or poorly different aspects are doing and find new ways to improve efficiency.
4. Improved cost-efficiency
With the help of inventory management software, your business can make smarter decisions and better use its resources. Automated programs like this one prevent you from ordering too much or not enough product; both scenarios would be bad for cash flow.
With the help of management software, your team can spend less time on data oversight and inventory. This means that you’ll have more resources to work with, meaning you don’t need to worry about errors as much.
5. Better customer service
It streamlines the ordering process by providing accurate inventory availability and location updates.
This customer engagement will help reduce your team’s time addressing questions or resolving concerns. If and when a customer needs to speak with someone, inventory management software also makes this process easier because it gives instant access to the order status of each individual’s purchase so that you can provide excellent service.
3 Companies That Scaled Better by Moving Far Away From Excel Inventory Management
Many companies cannot achieve their goals because they don’t have an inventory management system. But the ones who do make it work for them! Here are three examples of startups facing hurdles until they used Skubana’s platform to succeed quickly.
Moonglow creates unique jewelry that aligns with the phases of the moon and important dates in their customers’ lives. They had an exciting product, but they also had too many SKUs (700 individual components), which created about 5500 different combinations for each customer. To keep track of this all on paper wasn’t working so well.
Moonglow was overstocked on specific products, and they had no visibility into their sales. They switched to Shopify, partnered with Skubana for real-time inventory insights around the diversity of their offerings.
Moonglow first heard about bundling and kitting from Skubana. They were able to bundle their products, which accounted for all component SKUs of a product, so that they could accurately deduct them when sold as an individual piece. In the year before partnering with Skubana, Moonglow’s sales had been less than 1 million dollars–but after joining forces in 2016 (the following year), they closed out Q4 at over 2.5 million.
Death Wish Coffee
Death Wish Coffee has built a reputation for quality coffee and well-crafted blends. The company’s exposure skyrocketed in 2015 when they won the small business contest that awarded them with an ad during the Super Bowl, which led to an avalanche of attention and overselling across their two sales channels.
When Death Wish Coffee started noticing a decline in sales, they did some research and found Skubana. They realized that their inventory management was not up to par with other coffee companies, so they partnered.
Death Wish Coffee Company has learned a lot since its beginnings. Now, they have more insight into their inventory and can accurately cite numbers. This means that Death Wish can forecast better and gain greater control over the orders coming in and those going out, no longer overselling any products. With Skubana’s help, the company went back to doing what it does best: making great coffee while growing it’s brand available on store shelves across America.
Nomad Goods is a company that designs and manufactures accessories for travelers. After getting funding from Kickstarter, they could create the first product in their line: an easy-to-use USB cable charger with credit card dimensions.
But as Nomad Goods grew, it became harder to manage their inventory and sales channels. They weren’t able to keep track of what they had or where things were going.
Skubana has helped Nomad Goods solve their inefficiencies and increase sales. They were able to use Skubana’s systems to track inventory across every fulfillment point, expand on Amazon (something they had always wanted), and grow orders at a rate of 15% each month.
FAQs about Excel Inventory Management
- How is Excel used in stock and inventory management? Excel inventory management can help companies keep track of their existing inventory items. Using Excel worksheets, users can manually enter their product details into rows and columns to organize stock counts, check availability, and adjust these numbers as goods are sold.
Using Excel inventory template management sheets, companies can manually enter their product details into rows and columns to organize stock counts. This way, they can know the availability of each item and how many things have been sold.
- How do you create an inventory tracking spreadsheet in Excel? You can input relevant product categories as columns and add each product you carry into its designated column. Additionally, you can manually adjust your inventory quantities as sales occur over time. To create an inventory spreadsheet in Excel, go to Menu and select New, and then click on the Blank workbook to create a fresh Excel sheet.
To create an inventory spreadsheet in Excel, go to Menu and select New. Then click on the Blank workbook to open a fresh sheet of paper with room for your products. You can make columns that include categories like product name or size if you want them grouped; then, type each item into its designated column.
- What are the benefits of inventory management software over Excel? As your business grows, you need intelligent inventory management solutions that’ll evolve right along with you (something Excel spreadsheets can’t do). Inventory management software has several wide-ranging benefits, like automation, greater visibility, improved cost efficiency, and better customer service, which can enhance your eCommerce operations at every level.
As your business grows, you need a software solution that will grow right along it. Inventory management solutions have many benefits, such as automation and greater visibility, enhancing eCommerce operations at every level.