The Best Ecommerce Inventory Management

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Ecommerce Inventory Management is effective and attractive online storefront a reliable delivery plan and full knowledge of stock levels are essential for every ecommerce business most of these stores however make basic inventory management mistakes in the beginning that end up costing them a lot of money, such as not having an inventory management solution in place. The purpose of an Ecommerce inventory management system is to aid in the development of the firm as a whole. Companies may save time and money by employing this technology to improve their warehouse operations.

The success of any company may be traced back to its inventory management system. Your business’s front and back ends will benefit from its functionality. In the background, it plays a crucial role in the supply chain by connecting your business’s suppliers and its end users. For instance, it ensures that front-end amounts are right so that you don’t lose clients due to misleading data.

Management of your company’s inventory in an online store entails recording data on your stock’s physical location, quantity, cost, and composition. The ecommerce component takes into account the needs of an online merchant who might want to monitor stock levels across several online marketplaces.

What’s the Big Deal, Anyway?

Identifying the specific requirements of your organization is the first step in finding and implementing an effective Ecommerce Inventory Management solution. Why? Because managing your stock affects pretty much everything you do in your business.


From the outset, it allows you to track the quantity and position of your goods from the moment they enter your warehouse until the moment they are delivered to a client. Customers have a clearer picture of what’s in stock, what’s low, what’s missing, and how much of it there is. With this type of insight, you can anticipate stock needs and make preparations accordingly.

Your consumers will have a more satisfying shopping experience if you use an accurate Ecommerce inventory management system. You can be certain that your stock levels are always up to date thanks to the system’s ability to automate inventory procedures and sync quantity updates across all of your sales channels. As a result, online count advertisements are more accurate, and clients have a higher probability of acquiring the exact goods. An unsatisfactory transaction might result in the loss of a valuable customer. Things become clearer if stock levels are known.

What inventory management techniques are used in e-commerce?

It’s not possible to find a universal method for managing stock in online stores. Many companies use various methods to keep tabs on their stock since they all have distinct requirements. Review the following choices to see if any of them seem like a suitable fit for the way you run your business.

Analysis in Ecommerce Inventory Management

Using the ABC Analysis framework, we divide inventory into three distinct sections. The profitability of individual SKUs informs each of the groups. The only way to understand this is to dissect it. Products in Category

  • may have a high value yet be in short supply
  • Products with a medium combination of price and quantity can fall into the second category.
  • Finally, low-value but plentiful stock might fall

This method of categorizing stock allows your company to provide a wider variety of products for sale. Just why does that matter? Since offering a wide variety of products means you can develop unique restocking plans for each product category. You wouldn’t employ the same fulfillment tactics if you were a handbag merchant selling $2,000 handbags and $50 keychain accessories in the same store, either physically or digitally. There is a clear superiority in one product over another.

Hence, using an ABC analysis technique provides more management over the replenishment of each product, especially when coupled with an inventory anagement system.

Just-in-time Ecommerce Inventory Management

The just-in-time inventory strategy, or JIT, is ideal for businesses that don’t need to maintain a big stock of goods. Companies who can get away with just stocking what their consumers really buy will use this method. In most cases, the quantity of stock on hand corresponds exactly to the number of orders shipped. The JIT technique is well-exemplified by businesses that deal in seasonal goods. When their product’s popularity grows, they only buy what they need to meet customer demand. It’s safe to empty the shelves now, as the season is coming to a close, and they won’t be losing any money on outdated inventory.

This approach is not suitable for businesses that rely on consumer trends. Stock outs are expensive and can occur when demand suddenly spikes, as it did in numerous sectors in 2020 during Covid-19.


One of the most common and accessible methods of inventory management nowadays is dropshipping. Although this may seem like a simple inventory procedure, the fact that store owners seldom really handle the merchandise makes it anything but. You, as the company owner, instead have orders shipped straight to your customers from the manufacturer after they have been placed. You are not permitted to handle stock in any way.

Many new online retailers employ this strategy since they lack the capital to invest in a warehouse or storage facility but nevertheless want to expand rapidly. Whilst it may seem like a simple solution, the fact that you have no say in the customer’s actual interaction with the product being dropped shipped is a major negative. The manufacturer has the final say on storage and delivery methods because they are responsible for the bulk of the work once a consumer makes a purchase. A consumer would expect you to make things right if they got the wrong or a defective item.

First In, first out

Many stores that offer perishable items adhere to the FIFO (first in, first out) principle. The FIFO system ensures that the first items received into a warehouse are the first items shipped to clients. It’s not limited to businesses dealing with perishable products. This technique for managing stock is simple enough for anyone to use if they need to get rid of the goods quickly.

Nonetheless, it’s important to watch how your products and supplies are priced. Profits can balloon if the cost of products received is lower than the cost of goods sold, which can happen if prices tend to move often. Retailers who deal with perishable items sometimes employ a combination of the First Expired, First Out (FEFO) and Last In, First Out (LIFO) inventory systems.

Safety stock

Keeping a “safety stock” of excess goods in case of unexpectedly high demand is another common method of inventory management employed by merchants. While the JIT technique relies on just-in-time inventory, safety stock allows you to smooth out changes in demand and unforeseen delays in production. Safety stock is used by retailers to prepare for contingencies like inaccurate forecasting, fluctuating consumer demand, and varying lead times for your various raw supplies. So, having a buffer of excess stock on hand allows you to weather any storm.

Your company’s inventory represents its greatest asset. Use it as though it were one. Make more informed purchase decisions, improve warehouse organization, and see where everything is by putting into practice the inventory management principles outlined above.

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