Inventory management: e-commerce's #1 challenge
Inventory management is the most underestimated challenge in e-commerce. Too much stock means locked-up cash and the risk of unsellable products. Too little stock means stockouts and lost sales. Finding the right balance is crucial to your store's profitability.
In Algeria, this challenge is amplified by supply lead times (often 2 to 6 weeks from China or Turkey) and unpredictable demand. A good stock strategy must account for these specific constraints and rely on real data rather than intuition.
Know your ABC products
The ABC method sorts your products into 3 categories based on importance (revenue and turnover): A = the 20% of products that generate 80% of revenue (watch closely, never let them stock out), B = the 30% generating 15% of revenue (standard management), C = the 50% generating 5% of revenue (minimal stock, worth questioning).
On shopsdz, you can sort your products by revenue generated and identify your category A in a few clicks. Focus your efforts on these products: they deserve a higher safety stock, daily monitoring, and more frequent restock orders.
Calculating your safety stock
Safety stock is the minimum quantity to keep on hand to absorb the unexpected (delivery delays, demand spikes). Simple formula: safety stock = (maximum daily sales × maximum restock lead time) − (average daily sales × average lead time).
Concrete example: if you sell an average of 5 pairs of shoes a day (max 10), with a restock lead time of 14 days (max 21), your safety stock = (10 × 21) − (5 × 14) = 210 − 70 = 140 pairs. Below 140, you risk a stockout. Above it, your money sits idle.
Setting up restock alerts
Configure automatic alerts on shopsdz: as soon as a product drops below a set threshold, you get a notification by email and in your dashboard. These thresholds should be recalculated regularly as your sales evolve — a fixed threshold quickly becomes outdated.
Also set up a regular restocking schedule: for example, order from suppliers every Monday for delivery within 2 weeks. This avoids costly rush orders (express shipping fees, sometimes marked-up purchase prices).
- Automatic alerts when a product drops below its critical threshold
- A fixed supplier ordering schedule (e.g. every Monday)
- Monthly physical inventory to check theoretical vs. actual stock gaps
- Tracking past stockouts to adjust thresholds upward
Anticipating seasons and demand spikes
In Algeria, certain periods generate predictable demand spikes: Ramadan (increased sales of food, clothing, cosmetics), Eid al-Fitr and Eid al-Adha (clothing, gifts), back-to-school (supplies, children's clothing), Black Friday, and year-end holidays. Anticipate these spikes by ordering 6 to 8 weeks in advance.
On shopsdz, check your sales history over the past 12 months to identify your peaks. Order 30 to 50% extra stock for these periods, factoring in supply lead times. It's better to have a bit too much than to miss a sale during a peak.
Managing unsold stock without losing money
Despite all your precautions, you'll end up with unsold items. Don't keep them in stock too long: every day of storage has a cost (space, locked-up cash, obsolescence). Set up a progressive markdown strategy: -10% after 60 days, -25% after 90 days, -50% after 120 days, donation or bulk resale after 180 days.
Also use bundling techniques: combine an unsold product with a popular one to create an attractive discounted pack. The unsold item moves, and you add value to the popular product. You can also run monthly flash sales to clear unsold stock and create a sense of urgency among your customers.