Etsy, one of the best-selling platforms, offers creative individuals and small businesses a vibrant place to showcase their handmade, vintage, and unique products. If you wonder, “Is selling on Etsy worth it?” The answer is yes. With its large customer base, built-in customer, and user-friendly platform, Etsy provides ample opportunities for sellers to showcase their products and reach a global market. That also means inventory management is crucial if you want to make the most of your selling on Etsy.
So, in this guide, we will delve into the intricacies of Etsy inventory management, equipping you with practical strategies to enhance your overall operational efficiency. We’ll cover:
- Why is it important to manage your inventory on Etsy?
- Understanding inventory on Etsy Shop Manager Dashboard
- How to manage your Etsy inventory?
- Challenges of Etsy inventory management
From inventory tracking to demand forecasting and replenishment, we’ll explore key practices to help you maintain a well-organized shop and drive sustainable growth on Etsy. Let’s dive into the world of Etsy inventory management and unlock your shop’s full potential.
Why is it Important to Manage Your Inventory on Etsy?
Besides learning how to ship on Etsy, knowing how to properly manage inventory is essential for the success of your Etsy shop. It not only helps you maintain control over your stock levels but also enables you to deal with various challenges that arise in the eCommerce landscape. Let’s explore the reasons why Etsy inventory management is crucial and how it can help you address common problems.
#1. Avoid overstocking
One of the primary reasons to manage your inventory on Etsy is to avoid overstocking. Overstocking ties up your financial resources occupies valuable storage space, and increases the risk of products becoming outdated or unsellable. By carefully monitoring your inventory levels, tracking sales trends, and utilizing inventory forecasting techniques, you can prevent excess stock accumulation and optimize your product assortment.
#2. Meet customer demand
Inventory management plays a vital role in meeting customer demand. It allows you to ensure that popular items are consistently available and ready for purchase. By analyzing sales data, monitoring product performance, and implementing effective restocking strategies, you can fulfill orders promptly, reduce the risk of stockouts, and enhance customer satisfaction. Meeting customer demand in a timely manner fosters loyalty and encourages repeat purchases.
#3. Optimize costs
Efficient inventory management helps optimize costs associated with your Etsy business. You can reduce the costs of excess stock, storage, and potential obsolescence by maintaining optimal inventory levels.
Furthermore, effective inventory management enables you to identify slow-moving products or those with low profitability. Armed with this information, you can make informed decisions about discounting, promotions, or discontinuing certain items to optimize costs and maximize profitability.
#4. Streamline operations
Managing your inventory effectively streamlines your overall operations on Etsy by organizing your products orderly, implementing efficient storage systems, and utilizing inventory management tools. This leads to faster order processing times, reduces the chances of errors or shipping the wrong products, and improves overall operational efficiency. Simplifying workflows enables you to provide better customer service, handle higher order volumes, and effectively scale your business.
#5. Make informed business decisions:
Etsy inventory management provides valuable insights that can guide informed business decisions. By analyzing sales reports, inventory turnover rates, and customer feedback, you can identify trends, understand which products are performing well, and adjust your strategies accordingly. This data-driven approach empowers you to make informed decisions about purchasing, pricing, and expanding your product line. It helps you allocate resources effectively, identify growth opportunities, and make strategic choices that align with your business goals.
Understanding Inventory on Etsy Shop Manager Dashboard
Fortunately, in response to seller feedback and advocacy, Etsy introduced the Shop Manager area in 2017, which greatly simplifies seller inventory management. This comprehensive dashboard offers a variety of features, such as:
- Add and organize inventory
- Track and update inventory quantities
- Manage variants and options
- Check Etsy order
- Carry out fulfillment and shipping
Plus, the Etsy Shop Manager Dashboard provides visibility into your Etsy inventory, allowing you to easily handle Etsy orders and shipping and identify items that are in stock, out of stock, or on order. If you have any issues with Shop Manager Dashboard, you can ask Etsy for help for the seller to receive assistance.
#1. Add and organize inventory
To add new items to your inventory on the Etsy Shop Manager Dashboard, follow these steps:
- Start by Etsy seller login and navigate to the Shop Manager.
- Click on the Listings tab and select Add a Listing.
- Fill in the required information for your product, including the title, description, pricing, and any relevant tags or categories.
- You can also upload high-quality photos and videos of your product to showcase its features.
- Once you have completed the listing details, click Publish to make your product live in your shop.
You can create sections or collections within your shop to organize your inventory. This allows you to group similar products together and make it easier for customers to browse and find what they are looking for.
- Go to the Shop Manager and click the Listings tab.
- Select Manage, choose Add section.
- Name the section and Save
From there, you can manage your sections by assigning products to them.
#2. Track and update inventory quantities
The Etsy Shop Manager Dashboard provides an inventory tracking system that helps you keep track of your stock levels. To track inventory quantities, you can follow these steps:
- Log in to your Etsy account and access your Shop Manager.
- Navigate to the Listings section to view a list of your products.
- Each listing will display the current inventory quantity.
- You can easily track the inventory by checking the quantity listed for each item.
- Etsy also provides filters and search options to help you locate specific listings or view items with low stock. Compare the listed quantities with your physical stock to accurately track inventory levels.
- You can also generate inventory and sales reports to analyze your inventory levels and make informed decisions.
- Regularly monitor your inventory quantities, especially after sales or restocking, to ensure accurate tracking.
If you need to update the inventory quantity for a specific item:
- Locate the listing and click on it.
- In the listing details, find the Quantity field.
- Enter the updated quantity based on your available stock.
- Save the changes to update the inventory quantity.
The dashboard will automatically adjust the inventory quantities as sales are made, ensuring accurate stock management.
#3. Manage variants and options:
If your products have variants or options, you can easily manage them through the Etsy Shop Manager Dashboard. Here’s how to use Shop Manager Dashboard to manage listing variations:
- Access the Shop Manager and navigate to the Listings tab.
- Locate the product with variants or options and click on the Edit button.
- Scroll down to the Variations section.
- Add the different options such as size, color, or style.
- Assign unique SKUs, prices, and quantities to each option.
- If you want to offer additional customization options, enable the Personalization section and provide instructions for customers to enter their custom requests.
- Review all the information for accuracy, including variant prices, quantities, and options.
- Save the changes to your listing and publish it to make it available for customers to purchase.
This feature allows you to offer multiple choices within a single product listing, simplifying your Etsy inventory management process.
#4. Check Etsy orders
The Shop Management dashboards offer a dedicated section for Etsy order management. You can access Etsy tracking order by following these steps:
- Navigate to the Orders & Shipping tab or section, where you can find an overview of your order activity for tracking Etsy order. Once an Etsy order placed, you can check its Etsy order status, including pending, processing, or completed.
- Click on an order to view detailed information, such as customer details, shipping address, and purchased items.
- Utilize search filters and sorting options to easily locate specific orders based on date, status, or customer details.
Regularly reviewing your Etsy order helps ensure efficient order processing and customer satisfaction.
#5. Carry out fulfillment and shipping
You can easily manage your orders’ fulfillment and shipping processes once accessing the Manager Dashboard. Follow this step-by-step guide, to learn more about Etsy shipping tracking and fulfillment:
- Access the Shop Manager and go to the Orders & Shipping tab.
- Review the orders that need to be fulfilled.
- Once you have packaged the items, generate shipping labels directly from the dashboard or use an integrated shipping service. You can read our article about how to print Etsy shipping labels for more information.
- Update the order status as Shipped and enter the Etsy tracking number.
- Keep track of the order’s progress, including delivery updates.
Utilizing these features allows you to efficiently manage order fulfillment and provide timely shipping information to your customers.
How to Manage Your Etsy Inventory?
#1. Manage inventory from the start
Managing inventory is a critical aspect of running a successful Etsy shop. There are situations when sellers may face challenges when orders surge, and demand escalates. They may encounter difficulties such as shortages of raw materials, uncertainty regarding the location of materials or products, and inability to fulfill orders promptly. These circumstances can lead to unfavorable customer reviews and a decline in business.
By keeping track of your stock levels from the start, you can avoid the risk of running out of popular items and missing out on potential sales. To effectively manage your inventory from the start, consider these methods:
- Create a comprehensive product catalog with all the necessary details
- Determine initial stock levels based on anticipated demand and storage capacity.
- Implement an inventory tracking system using Etsy inventory spreadsheet, software, or Etsy’s inventory tools.
Moreover, managing inventory from the start ensures accurate tracking, prevent stock issues, and make informed business decisions for your Etsy shop.
#2. Organize your workplace
To effectively manage your Etsy inventory, it is crucial to organize your workplace in a systematic manner. The goal is to ensure that everything has a designated place and is stored accordingly. Start by decluttering and creating designated areas for different tasks and materials. It is advisable to keep frequently sought-after items easily accessible, while less frequently used materials can be stored out of sight. A well-organized workspace will save you time, reduce errors, and streamline your inventory management processes.
#3. Restock popular products quickly
When a product gains popularity and starts selling well, it is important to meet the increasing customer demand to avoid stockouts and potential sales loss. To determine which products are selling quickly, makers can analyze sales data, the number of views, favorites, and conversions for each listing. This information provides valuable insights into the products that are in high demand. By monitoring sales trends and customer preferences, makers can anticipate restocking needs and adjust production or sourcing accordingly.
Promptly restocking popular products ensures a consistent supply for customers, enhances customer satisfaction, and maximizes sales potential. It is advisable to maintain a proactive approach by regularly reviewing sales data and adjusting restocking strategies accordingly.
#4. Review your Etsy Stock
Regularly reviewing your Etsy stock is essential to maintaining a well-managed inventory. By frequently assessing your stock levels, you can ensure that you have the right products available to meet customer demand and avoid potential stock outs or overstocking situations. Regular stock reviews also enable you to identify any discrepancies or errors in your inventory records and take corrective actions promptly.
When reviewing your Etsy stock, consider factors such as sales trends, upcoming promotions or events, and any changes in customer preferences. This information will help you make informed decisions about restocking, adjusting product quantities, or introducing new items to your inventory.
Make it a habit to review your Etsy stock on a regular basis, whether it’s weekly, monthly, or based on your business needs. This proactive approach will contribute to efficient inventory management and ultimately support your success on the Etsy platform.
If you find it challenging to review frequently, consider utilizing the auto-renewal option on Etsy. This feature automatically renews your listings, ensuring that your products remain available for sale even if you are unable to review your stock frequently. It provides convenience and helps maintain a consistent presence in your shop.
#5. Use SKUs
To effectively manage your Etsy inventory, utilizing SKUs (stock-keeping units) is crucial. Setting up SKUs involves assigning unique alphanumeric codes to your products for easy identification and tracking. Here’s how you can set SKUs:
To set SKUs for effective Etsy inventory management, follow these steps:
- Keep SKUs concise, typically within 5-9 characters.
- Utilize a combination of numbers and letters to minimize character count and prevent repetitive number sequences.
- Use different digits and letters in SKUs that reflect any variations in colors, patterns, or other product attributes.
- Avoid using the letters “O” or “I,” as they can be easily mistaken for numbers.
- Don’t use symbols like commas or dashes, which may cause conflicts in programs like Excel.
For instance, if you sell jewelry, you can use J01 for necklaces, J02 for bracelets, and so on. Use the middle digits to indicate unique qualities, such as 001 represents gold material, while 002 indicates silver. End the sequence with 1-3 characters to represent the iteration of the product. For instance, V1 signifies the first version, V2 indicates the second version, and so on. Let’s say you sell a gold necklace, the SKU could be J01-001-V1, where J01 represents necklaces, the second 001 represents gold, and the final V1 denotes the first version.
By implementing SKUs consistently and integrating them into your inventory management system, you can streamline your Etsy inventory management process and improve efficiency in tracking, organizing, and fulfilling orders.
#6. Utilize Etsy spreadsheets
When you’re starting out, using a spreadsheet to track your inventory is a straightforward and affordable method. It’s particularly useful for small quantities of items, providing a convenient overview of stock levels, reorder requirements, and shipping deadlines. Automation features can also assist in simplifying inventory management tasks within the spreadsheet.
However, as your order volume increases, manually handling Etsy inventory through a spreadsheet becomes overwhelming. To address this challenge, external tools and software for Etsy inventory management come into play.
#7. Create a smart storage system
If you’re in the early stages and rely on traditional pen-and-paper methods, there are some simple tricks you can employ to maintain accuracy:
- Choose a dedicated space to store your products, such as a closet, shelf, or storage unit.
- Arrange your items based on their names or categories in alphabetical order. This method allows for easy identification and retrieval of items when fulfilling orders.
- Use clear bins or boxes to store your products, with labels or tags indicating the product type, color, and size.
- Store your products in a logical order, such as by product type or popularity.
These approaches will simplify the process of finding specific items and help ensure that your inventory is well-organized and easily accessible.
#8. Work with external tools and software
It’s beneficial to leverage external tools and software for Etsy integration, which are specifically designed for inventory management to manage your Etsy inventory efficiently. These tools offer advanced features and automation capabilities that streamline your operations. They can help you track inventory levels, update stock quantities, generate sales reports, and even sync your inventory across multiple sales channels. If you don’t want to stop at Etsy and want to expand your business across platforms, our multichannel selling guide might help.
A popular Etsy inventory management software is LitCommerce tool. Etsy integrations with this tool can help you save time, reduce errors, and gain better control over your inventory. Explore different options and choose a tool that aligns with your business needs and budget to optimize your inventory management processes.
Challenges of Etsy Inventory Management
Managing inventory on Etsy comes with its own set of challenges that sellers must navigate. In this guide, we will explore the key challenges of Etsy inventory management and discuss strategies to overcome them effectively.
#1. Managing Stock Levels
One of the primary challenges of Etsy inventory management is effectively managing stock levels. It impacts their ability to fulfill orders and meet customer demand. Insufficient stock can lead to missed sales opportunities and dissatisfied customers, while excess inventory ties up capital and storage space. Maintaining optimal stock levels requires accurate forecasting, monitoring sales trends, and implementing inventory control strategies to balance supply and demand.
#2. Dealing with Product Variations
Etsy allows sellers to offer products with various variations, such as color, size, or style. Managing inventory for these product variations can be complex and time-consuming. Sellers must accurately track the availability of each variant and ensure that listings reflect the correct options. Proper organization, clear labeling, and inventory tracking systems are essential to avoid confusion, prevent overselling, and maintain accurate stock levels for each variant.
#3. Tracking Sales and Inventory Data
Tracking and analyzing sales and inventory data is necessary for making informed business decisions. However, gathering and consolidating data from Etsy’s platform can be challenging. Sellers need to monitor sales trends, assess product performance, and identify popular items or slow-moving inventory. By leveraging reporting tools, spreadsheets, or external software integrations, sellers can gain insights into their sales and inventory data, enabling them to optimize their product offerings, pricing strategies, and inventory replenishment plans.
Effective inventory management plays a vital role in helping Etsy sellers overcome obstacles, improve efficiency, and attain business success. By employing appropriate tactics, sellers can streamline their workflows and unlock their full potential on the Etsy platform.
Etsy Inventory Management FAQs
- How many variations can you have on Etsy?
Regarding variations on Etsy, this top marketplace for selling products allows sellers to offer up to 70 variations per listing. This means you can provide a range of options for your customers, such as different colors, sizes, or styles, within a single listing.
- How to sell on Etsy without inventory?
Selling on Etsy without inventory is possible through the use of drop shipping. This model allows you to partner with a supplier who holds the inventory and handles the fulfillment process. When a customer places an order, the supplier ships the product directly to the buyer, eliminating the need for you to keep inventory on hand.
- Does Etsy deliver to your door?
If you want to know about shipping with Etsy, you should note that this platform does not handle the delivery process. Sellers are responsible for shipping their products to customers. You can choose the shipping methods and carriers that best suit your business needs. Etsy provides tools and features to help you generate shipping labels, track packages, and communicate with buyers about their orders.
It’s important to familiarize yourself with Etsy’s shipping policies and guidelines to ensure a smooth delivery process and provide accurate information to your customers. To learn more about shipping on Etsy, check our guide on how to ship with Etsy.
- How to cancel Etsy order as a seller?
To cancel an Etsy order of your customer, follow these steps:
- Access your Etsy seller account and navigate to the “Orders” section.
- Find the specific order that you want to cancel.
- Open the order details by clicking on it.
- Look for the option to Cancel Order or Request Cancellation. Click on it.
- Etsy will guide you through the cancellation process, which may include selecting a reason for cancellation and confirming your decision.
- Communicate with the buyer about the cancellation, providing a clear explanation and any necessary refunds.
- If applicable, issue a refund through Etsy’s refund system.
Remember to communicate promptly and transparently with the buyer throughout the cancellation process to maintain good customer relationships.
Conclusion
Efficient Etsy inventory management is essential for sellers to thrive in the online marketplace. By effectively managing inventory data, sellers can enhance customer satisfaction, minimize costs, and drive business growth. Implementing the right strategies and utilizing technology tools are key to achieving success on Etsy.
If you need further help, reach out to LitCommerce for support. For additional online selling strategies, consider joining our community and check out our Retailer blog for valuable insights.
