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E-commerce Challenges in Online Retail and How to Conquer Them

By Contributing Author | 03/09/2018 | 8:00 AM

By Erhan Musaoglu, CEO and co-founder, Logiwa Corp.

E-commerce is a highly competitive space for most retailers. If they don’t have enough capital to spend on sales and marketing, they end up not only losing sales, but trailing behind the competition as well. Being an online retailer is a difficult, headache-inducing business; you have to often juggle multiple sales channels, manage your inventory levels, and increase customer satisfaction at the same time. Worse, the rise of duplicates and fake stores nowadays cause your customers to view your ecommerce business with even more scrutiny, making gaining repeat customers hard to achieve.

A few of the challenges of working in e-commerce:

Each Delivery

A traditional warehouse usually ships products directly to another business – mostly in higher quantities and in bulk. Unlike B2B businesses, B2C warehousing involves a higher number of individual orders and smaller quantities within the order. B2B businesses, on the other hand, rely on each delivery, meaning they often ship one product at a time. This can be time consuming, and often reduce productivity when compared with larger businesses.

Scalability and Temporary Workers

The fluctuations in demand from season to season require a temporary workforce, which can mean additional licenses, industrial scanners and training. Additionally, temporary workers need to be entered into whatever record-keeping system you currently use, resulting in a productivity loss due to wrongly assigned or nonfunctional scanners and input systems.

Single Items

In e-commerce, the average number of single-item orders is around 30%-50%. A traditional warehouse management system is familiar with and good at picking pallets and boxes from the warehouse, but not picking single items. This means that picking a single order can take longer than it would otherwise.

Missing sales opportunities can be as painful as overselling. You might have items received into your warehouse or have cancelled orders or have items that can be drop shipped from your supplier during the day. You need to add these into your inventory on all your stores in Amazon, Ebay, Walmart, 3dcart.

By using a proper inventory management software, you can build API connection to all your sales channels and update your inventory in real-time.

So how do you break even?

One way to help combat the daily struggles of online retail business is by investing in Inventory management software. Inventory management or warehouse management software (WMS) for e-commerce gives companies access to real-time and accurate inventory, order, and shipment data. When this data is pushed back to marketplaces and shopping carts, your company can avoid overselling and missing sales opportunities. Having this data at your fingertips gives you the ability to create demand forecasting models and optimize your shipment processes, and thus save you money.

Here are a few ways that inventory management software can help overcome the challenges of online retail inventory management:


Inventory Management Systems are designed to help your business increase its accuracy in regards to inventory. This means that the system is designed to help you by doing things like predicting inventory levels and reorder points, keeping track of inventory and returns, and managing individual orders through technologies like barcodes. The most common and affordable technology is barcode and voice technologies. By scanning the product barcode and location barcode, inventory management software ensures the right product is picked from or put away to the right location.

Using barcode technology provides greater productivity and accuracy to the business than traditional inventory management methods.  


The different SKUs in an e-commerce warehouse usually can be overwhelming to keep track of, especially when your warehouse has hundreds or thousands of products. A picker can spend hours walking around the warehouse, sometimes walking up to 10 miles a day! Unorganized inventory will lead to major productivity losses compared to your competition, and can be detrimental to keeping your business competitive. One way you can minimize this is by optimizing the walking path of your picker in the warehouse. By reducing walking distance through techniques such as batch picking and optimized routes, you can reduce walking distance more than 30%.

Another way to increase productivity is by handling backorders. The average backorder ratio is 15% percent in an e-commerce warehouse. A next generation inventory management software can help you identify the backorders during receipt and allocate products to backorders. This way, the products are transferred directly to packing stations without put-away.

Finally, a third way to increase productivity is by planning the workload for each shift ahead of time. This ensures that no one shift is overloaded with extra work, and that they all have the resources they need to succeed.

Customer Satisfaction

Inventory management software also benefits customers because they are provided with on-time and accurate data of their orders and shipments. This allows your customer service level to improve drastically, and first-time customers become returning customers.

E-commerce businesses using a sophisticated WMS can easily keep track of all orders in the warehouse, including returns. By tracking everything automatically, you can recover a lost customer by returning their money promptly, or sending the correct item right away. This is one of the real gains of an inventory management system for an e-commerce business, because you not only add value to the business through automation, but add value to your customer service approach as well.


Erhan Musaoglu

Erhan Musaoglu is the CEO and co-founder of Logiwa Corp., a supply chain management systems company. Erhan has over 20 years of experience in the warehouse management industry, and has used his experience in industrial engineering and consulting to create multiple companies, including Unitec and IFS. In order to share his knowledge with larger crowds, he has lectured at various universities on e-commerce supply chains and warehousing. His expertise and leadership in navigating the enterprise and B2B industry has lead Logiwa to grow exponentially.  He can be followed on Twitter at @ErhanMusaoglu or on LinkedIn.

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The opinions expressed herein are those solely of the participants, and do not necessarily represent the views of Agile Business Media, LLC., its properties or its employees.

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Welcome to "One-Off Sound-Off," a blog page devoted to guest commentary on all things supply chain. This is a space where industry leaders can share their opinions and expertise with the logistics and supply chain community. If you have an article or commentary you'd like to share, please consider sending a guest blog proposal to feedback@dcvelocity.com.


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