Complete Guide to Practicing Good Inventory Management and Selecting the Best Inventory Management Software for eCommerce

What is eCommerce Inventory Management?

Inventory management for eCommerce is the process of tracking and managing the stock of products sold by an online business. This includes monitoring the inventory levels of products, organizing storage, and ensuring that orders are fulfilled in a timely manner. It also ensures that the product inventory is filled with the right products and that the inventory is updated regularly with accurate information. Additionally, eCommerce inventory management helps businesses identify potential inventory issues like stockouts, overstocks, and product expiration, and can help them make informed decisions about product pricing and stocking levels. By using eCommerce inventory management, businesses can streamline their inventory processes, increase efficiency, and improve customer satisfaction.

What is an eCommerce Inventory Management Software System?

An eCommerce inventory management software system is a type of software that helps businesses track and manage their inventory, from purchasing to storing to selling to delivering. It identifies when they need to replenish their inventory and how much they need to buy. Additionally, it can help businesses keep track of their stock levels, manage customer orders, and even gauge the performance of their products. The software can provide businesses with real-time visibility into their inventory, allowing them to make informed decisions about inventory levels. Ultimately, this type of software can help businesses improve their efficiency, reduce costs, and ensure they always have the products their customers need.

Benefits of eCommerce Inventory Management 

Achieve Unprecedented Levels of Data Accuracy for Your eCommerce Business

Improved accuracy of inventory data is a key benefit of an eCommerce inventory system. The system automates and streamlines the inventory process, from purchase orders to fulfillment and shipping. It tracks incoming shipments and inventory turnover, stores detailed product information, and helps ensure complete inventory control. The system also prevents manual data entry errors and provides an accurate picture of stock on hand via real-time updates, enabling businesses to make informed decisions about replenishing stock.

Make Your Supply Chain Run Smoothly with Automated Ordering

Automated ordering from suppliers is an inventory management process that uses technology to streamline order management. Orders are sent electronically, eliminating the need for manual orders and reducing errors. This process allows companies to keep better track of their inventory and reduce costs by tracking average order sizes, comparing prices from different vendors, and even negotiating prices with suppliers. This helps companies save time and money while still ensuring they have the products they need to meet customer demand.

Use the Right Inventory Management Techniques to Boost Customer Satisfaction 

An eCommerce inventory management system helps increase customer satisfaction by providing accurate and up-to-date information about product availability. This allows customers to easily check stock levels and order exactly what they need without worrying about running out. The system also allows customers to quickly find out when new items become available, and when backorders can be filled. This provides customers with a better shopping experience, as they can trust that the products they need are available when they want them. Additionally, the inventory management system can help ensure that customers are not overcharged due to incorrect pricing or availability data. By streamlining the inventory process, an eCommerce inventory management system can help businesses provide their customers with a smooth and enjoyable shopping experience.

Gain a Competitive Edge with Better Inventory Visibility

An eCommerce inventory management system helps improve inventory visibility by providing real-time data and insights into stock levels across all sales channels. This system allows businesses to quickly identify and proactively address issues before they occur (e.g., stock-outs or excess inventory). With improved visibility, businesses can optimize inventory to ensure customers have the right products in the right place, at the right time. The system also helps businesses to better forecast future demand and adjust inventory levels accordingly. With better visibility, businesses can also reduce the risk of out-of-stock items and improve customer satisfaction. Additionally, an eCommerce inventory management system can also help businesses to better manage their supply chain, ensuring that inventory is always available and delivered on time.

Streamline Operations and Increase Efficiency with Inventory Management Solutions

An inventory software solution helps an eCommerce business owner increase efficiency by providing visibility into the entire inventory pipeline. This system can track inventory from the moment it arrives in the warehouse through the point of sale. It can alert businesses when stock is running low, helping them avoid stock-outs. Additionally, the system can generate reports that provide detailed insights into sales, inventory levels, and trends. This allows businesses to make informed decisions about where to allocate resources and create efficient operational processes. Furthermore, an eCommerce inventory management system can easily integrate with other tools, such as order fulfillment systems, enabling businesses to streamline their entire order management and fulfillment process

Transform Your Business By Reducing Inventory Costs

An eCommerce inventory management system helps reduce inventory costs by streamlining the processes related to inventory tracking, reordering, and monitoring. The system automates processes like stock level tracking, reordering of items, and tracking of orders. This helps to reduce the amount of time and manual effort required to manage inventory. Additionally, the system can provide real-time visibility into inventory levels, enabling businesses to make better-informed decisions on when, and how much, to reorder. By providing accurate, up-to-date information, an eCommerce inventory management system can help businesses reduce the amount of stock they hold, and reduce their overall inventory costs.

Implement Inventory Management to Improve Customer Service

An eCommerce inventory management system helps improve customer service by providing visibility into stock levels and order history. This allows businesses to more accurately assess how much inventory is on hand, so they can order new stock before running out. Additionally, stock levels can be tracked in real-time, so customers can be informed if an item is out of stock and when it will be available again. By having this information readily available, customers can be served more quickly and efficiently, leading to improved customer satisfaction. Furthermore, an eCommerce inventory management system can also keep track of customer order histories, allowing businesses to better anticipate customer needs and provide tailored service.

Track Stock Movements with Ease

An eCommerce inventory management system helps facilitate easier tracking of stock movements by providing a centralized system for tracking inventory levels, orders, and shipments. It allows businesses to monitor stock levels in real time, trace inventory items from purchase to sale, conduct inventory counts, and generate reports to help manage stock levels. With accurate and up-to-date information on stock levels and orders, businesses can quickly identify any errors, such as incorrect item counts or shipments. The system also allows businesses to set reorder points and stock levels, so they can be prepared with the right amount of inventory at all times. Additionally, the system helps with forecasting, enabling businesses to better anticipate customer demand and adjust their inventory levels accordingly.

Harness Automation to Enhance Scalability

A proper inventory management system helps enhance scalability by providing a comprehensive suite of tools for tracking and managing inventory. This system provides an efficient and accurate way to monitor and control the movement of goods and materials, as well as the availability of stock. It also helps ensure that all available inventory is used to its fullest potential. By automating the process of stock management, it reduces the amount of time and resources required to manage inventory, thus allowing businesses to scale up their operations quickly and efficiently. In addition, the system can help identify and eliminate excess stock, freeing up valuable resources and capital. Finally, an eCommerce inventory management system can also provide detailed reports to help businesses make informed decisions about the size and level of inventory they need to maintain in order to meet customer demand.

Mitigate Risk by Reducing Errors

Effective inventory management helps reduce the risk of errors by automating the process of managing inventory. It offers real-time visibility into inventory status, enabling businesses to make informed decisions. The system also offers predictive analytics to help businesses predict future demand, enabling them to plan and adjust inventories accordingly. Additionally, the automated system can help with order fulfillment, ensuring that orders are shipped quickly and accurately. Finally, an eCommerce inventory management system can help streamline communications between stakeholders, ensuring that everyone is on the same page.

Challenges of Inventory Management for eCommerce

Achieving Accuracy in Demand Forecasting

Accurate forecasting of demand is one of the greatest challenges in managing your inventory. In a world of ever-changing consumer preferences and trends, it can be difficult to predict what customers will want in the coming months or years. This can lead to either an over-investment in inventory, which will result in increased costs and lost profits, or an under-investment in inventory, which can cause stockouts and lost sales (poor inventory management). Additionally, the difficulty in predicting customer demand is compounded by changes in the external environment, such as economic shifts, new competitors, or political upheaval. It is essential for eCommerce inventory managers to stay up to date on industry trends, customer preferences, and inventory management methods in order to accurately forecast demand and ensure that inventory levels are appropriate for the current market conditions.

Managing Multiple Sales Channels

Managing multiple sales channels within an eCommerce inventory management platform can be a challenge due to the complexity of keeping track of stock levels, pricing, and tracking inventory across multiple platforms. In order to ensure that customers are able to purchase items when they need them, eCommerce businesses must be able to accurately forecast and monitor stock levels for all of their channels. Additionally, pricing and product availability must be kept consistent across all channels to ensure a seamless customer experience. Merchants must also ensure that their inventory management systems are compatible with each sales channel, as different platforms require different solutions for inventory management.

Tracking Inventory Levels in Real Time

Because inventory levels are constantly changing as customers place orders and items are shipped, returned, and restocked, the ability to track inventory information in real time is a common inventory management issue. Keeping track of these changes requires an inventory management tool that can quickly update and provide accurate information. Without accurate tracking, retailers may be unable to fulfill orders or may be forced to hold inventory, leading to increased costs. Tracking inventory levels in real-time requires a reliable, automated system that can quickly and accurately process customer orders, detect changes in inventory levels, handle updating inventory, and alert the business to potential problems.

Keeping Inventory Costs Under Control

Inventory costs refer to all the costs associated with managing and maintaining inventory, including the costs of storing, shipping, and insuring items in your inventory. These costs can add up quickly, especially for small eCommerce businesses that are managing a large inventory. Keeping those costs under budget means having control of your inventory management. This means that eCommerce businesses must have a good handle on their inventory levels, accurately forecast their future inventory needs, and adjust their ordering and stocking policies accordingly. Additionally, businesses must be aware of any potential issues that could lead to inventory costs increasing, such as shipping delays, damaged goods, or product obsolescence.

Automating Inventory Restocking

Automating inventory restocking is a challenge that requires a deep understanding of the specific needs of a business. Restocking inventory involves analyzing data and inventory records about customer demand and sales, deciding what products to restock, and when to restock them. This process is complicated and can vary greatly from one business to the next. Additionally, it requires a deep knowledge of the entire supply chain and the complexity of forecasting customer demand. Software will help direct this process with sophisticated algorithms that can accurately predict customer demand and make decisions re: updating inventory levels to restock the right products at the right time.

Ensuring Quality Control for All Types of Inventory

Ensuring quality control of everything from inventory can be a daunting task. It is especially challenging as the products are often coming from different suppliers who have different standards and processes. Additionally, with eCommerce, it can be difficult to physically inspect the products, as they are not always available for viewing. This means that third-party inspection services may need to be used as options for inventory quality control maintenance. An efficient inventory tracking system can also help identify faulty products so they can quickly be replaced.

Dealing with Product Obsolescence

Dealing with product obsolescence of inventory on hand is one of the biggest challenges with inventory management. Product obsolescence occurs when a product is no longer desirable or fashionable, making it difficult to sell and resulting in a loss of revenue. This is particularly problematic in the eCommerce space, as products can quickly become obsolete due to changing trends, customer preferences, and technological advancements. Because eCommerce inventory management requires a significant amount of capital and resources to maintain and manage, it may be difficult to quickly discard obsolete products. To address this challenge, eCommerce businesses must continuously monitor market trends, remain proactive in product development, and create strategies to quickly liquidate obsolete products. Advanced inventory management includes strategies such as discounting, offering bundles, or donating to charity. By effectively managing product obsolescence, eCommerce businesses can reduce costs, maximize profits, and ensure that customers remain satisfied.

Managing Returns and Refunds

Managing returns and refunds is a major challenge within eCommerce inventory management. Returns are costly and time-consuming to process, while refunds can lead to financial losses. Returns can also create inventory imbalances, as the returned item might be out of stock, or require a different size or color. Additionally, eCommerce businesses need to consider the potential costs associated with restocking fees, shipping costs, and processing fees. It is important to have a well-defined returns and refunds policy in place to ensure that customers have a positive experience and that the business is not overburdened with costs.

Integrating Inventory Data with Other Systems

Integrating inventory data with other management software is very important for any eCommerce merchant. This is because inventory data is often stored in disparate systems (e.g., a warehouse management system, point-of-sale system, eCommerce platform). This can create discrepancies between the physical inventory and the digital inventory, resulting in out-of-stock items or incorrect pricing. Additionally, integrating these different systems can be difficult and time-consuming, as each software also may have different data formats and standards. Furthermore, there is a risk of data loss or corruption when transferring data between systems. To address these challenges, companies need to develop a comprehensive inventory management system that can integrate data from multiple sources. This system should be able to accurately track and manage inventory data, as well as provide accurate and up-to-date information to all stakeholders.

Storing and Shipping Products in a Cost-Efficient Manner

Storing and shipping products in a cost-efficient manner is a significant challenge within eCommerce inventory management. Storing products efficiently requires warehouses to be designed with enough space to store the products and an efficient way of storing them. Shipping products cost-effectively requires a good understanding of the weight and size of products, shipping rates, and the ability to track orders and shipments. Additionally, an efficient shipping process requires that carriers be properly selected and used to ensure timely delivery, as well as accurate tracking systems to ensure that orders are delivered on time. Finally, warehouse management systems must be used to ensure that orders are accurately fulfilled and sent out in a timely manner. To ensure cost efficiency, inventory management professionals need to have an understanding of the different aspects of the inventory process, and they need to have the right tools and strategies in place to ensure that products are efficiently stored and shipped.

Grow Your eCommerce Business with These Best Practices for Good Inventory Management

Optimize Your Inventory Management with Automated Software

Inventory management software is designed to automate processes to provide accurate and efficient tracking of stock levels. This type of software provides real-time updates on inventory, so businesses can quickly adjust their stock levels and maximize profits. Additionally, inventory management software can save businesses time and money by automating mundane tasks such as ordering, tracking, and restocking items. Automation also reduces the chances of human error, allowing businesses to focus their efforts on more important tasks. Finally, automated software can provide valuable insights into customer demand, so businesses can make more informed decisions about stock levels and pricing.

Save Time and Money by Streamlining Order Processing and Distribution 

Streamlining order processing and distribution is another of many effective inventory management features. It involves automating order processing and creating efficient systems for shipping, tracking, and delivery. This helps to reduce the time and costs associated with managing inventory. Automation also eliminates manual errors, resulting in improved accuracy and faster order fulfillment. Additionally, streamlining order processing and distribution enables businesses to better track their inventory, identify trends, and proactively manage their stock. This allows them to better meet customer needs, reduce stockouts, and increase customer satisfaction.

Use Demand Forecasting to Make Timely Inventory Adjustments

Forecasting demand and adjusting inventory accordingly is a crucial eCommerce inventory management strategy. This involves predicting future customer demand for products and planning inventory to meet that demand. By keeping track of current sales trends and industry news, companies can anticipate customer demand and adjust their inventory accordingly. Software that allows forecasting can also help to reduce costs associated with inventory storage and management, as companies can accurately determine how much inventory they need to store. By predicting and adjusting inventory based on customer demand, companies can better manage their eCommerce inventory and maximize sales and profits.

Control Your Inventory with Regular Inventory Accuracy Audits

Performing regular inventory accuracy audits is an effective eCommerce inventory management strategy as it helps to ensure the accuracy of data and reduces potential losses. Audits involve verifying the accuracy of stock information stored in the system (quantity, location, cost of the items, etc.). This helps to identify discrepancies in the data and any potential issues that may arise. Additionally, it allows businesses to identify any potential inventory shrinkage and take proactive steps to reduce it. By performing regular audits, businesses can ensure their inventory is up-to-date and accurate, and can make better decisions about the inventory they need to keep in stock. 

Ensure Consistency with Clear Inventory Tracking and Categorization Protocols

Establishing clear protocols to categorize and track your inventory is an effective strategy. This benefit of inventory management helps to ensure accuracy and consistency when it comes to managing inventory. With established protocols, businesses can easily keep track of their inventory and ensure that they have the right amount of products in stock. Additionally, categorization protocols help to provide a better understanding of product availability, pricing, and expiration dates. This helps to maximize efficiency and minimize lost sales opportunities due to incorrect inventory management.

Make Use of Cloud-Based Systems for Access From Anywhere

Cloud-based systems for remote access allow store owners to quickly and easily access their inventory data from anywhere with an internet connection. This can help them to streamline their operations, increase efficiency, and reduce costs. Additionally, cloud-based systems offer an easy way to access real-time sales data, meaning store owners can quickly monitor stock levels, determine if they have enough inventory, and make adjustments as needed. Finally, cloud-based systems enable store owners to easily share inventory data with suppliers and other stakeholders, improving collaboration and communication.

Maximize Accuracy with Barcode Scanning

By incorporating barcode scanning the inventory manager can quickly and accurately track the number of items in stock. Barcode scanning systems also help determine which items are in high demand and which items are not selling. Furthermore, barcode scanning helps to reduce errors, as the inventory manager and their team do not have to manually enter data.

Achieve Organizational Awareness by Tracking Orders and Invoices

Tracking orders and invoices for better organizational awareness helps merchants monitor the status of orders, invoices, and payments. It also helps to identify any discrepancies in the system and prevent delays in the delivery of products. This can provide customers with a better experience as they can know when their orders will arrive. Additionally, it helps organizations to have better control over their finances and stock, allowing them to make better decisions on their inventory.

Leverage Powerful Data Analytics to Identify Trends and Needs

​​By leveraging data analytics, businesses can accurately predict customer demand and optimize their inventory accordingly. This helps businesses save time, money, and resources, as they only have to purchase the items customers need. Additionally, data analytics can be used to track customer buying habits, allowing businesses to target their marketing efforts more effectively. By understanding customer needs and buying trends, businesses can make informed decisions about stocking inventory and ensure their customers are satisfied with their products. This strategy is essential for eCommerce businesses looking to maximize their sales and profits.

Automate Replenishment Systems for High-Demand Items

Automated replenishment systems are based on predetermined criteria and algorithms that allow eCommerce businesses to monitor their inventory and anticipate customer demand. By tracking sales and usage data, businesses can set thresholds for when to order new merchandise. In addition, automated replenishment systems can be easily integrated with eCommerce platforms, providing real-time updates on stock levels and replenishment orders. This helps to ensure that customers always have access to the merchandise they need.

What to look for in the Best eCommerce Inventory Management Software

Good Inventory Management Means Real-Time Inventory Tracking and Visibility

Real-time inventory tracking and visibility is especially useful for businesses that operate with a just-in-time inventory management system, as the ability to track inventory in real-time allows the business to plan ahead and make sure they have the supplies they need when they need them. Additionally, real-time inventory tracking and visibility makes it easier to spot discrepancies in inventory numbers and address any potential problems before they become bigger issues. This feature helps businesses ensure that their inventory levels are always accurate and up to date, resulting in fewer losses and improved customer satisfaction.

Automated Ordering and Reordering Helps Grow Your eCommerce Brand

Automated ordering and reordering helps to streamline the process of restocking and replenishing product inventory. It eliminates the need for manual intervention, allowing online stores to quickly and accurately restock the products they need, when they need them. This process helps to reduce the risk of running out of inventory and ensures that customers can always find the products they are looking for. Automated ordering and reordering also helps to reduce the cost associated with manual ordering and helps to improve customer satisfaction.

Vendor Management Solutions Fuel Your Inventory Management Strategy

Vendor management allows companies to easily organize, communicate with, and empower their vendors. The software simplifies the process of tracking vendor information, such as contact details, invoices, and purchase orders. It also allows companies to track vendor performance, so they can identify vendors who are not meeting their expectations and take appropriate action. Additionally, vendor management can help companies reduce costs by providing better visibility into their vendors’ prices and delivery times. This can help the company negotiate better deals with vendors and ensure they are getting the best value for their money.

Barcode Scanning Functionality is a Non-Negotiable Best Practice

​​Barcode scanning is a desirable feature of eCommerce inventory management software because it allows for quick and easy tracking of goods. This helps to ensure that goods are always in stock and that inventory is up to date. Additionally, it can help to reduce errors in ordering and shipping. Barcode scanning makes it much easier to identify and locate items in the inventory, which helps to speed up the process of fulfilling orders. Furthermore, it can help to reduce the amount of time spent on manual data entry. Ultimately, barcode scanning provides a more efficient and accurate way to track inventory, resulting in a more successful eCommerce business. 

The Best eCommerce Inventory Software Enables Multiple Warehouse Management 

Multiple warehouse management offers businesses more flexibility in managing their inventory, as they can store and manage inventory levels across warehouses that are closer to their customers, reducing shipping costs and time. Additionally, it allows businesses to scale up and down as they need, by opening and closing warehouses as needed. Furthermore, multiple warehouse management allows businesses to better manage their inventory and stock levels, ensuring that they don’t understock or overstock in any particular warehouse. This ultimately leads to better customer service and satisfaction as businesses can ensure that the products customers need are always in stock and ready to be shipped quickly.

Accurate and Timely Reporting is a Tenet of an Inventory Management System

Accurate and timely reporting are essential features of eCommerce inventory management software. This helps to ensure that orders are fulfilled correctly and on time, preventing stockouts and overstocks. Accurate reporting helps to identify areas for improvement and cost savings, such as reducing inventory levels or streamlining purchasing processes. Timely reporting also allows managers to quickly identify and resolve any issues, such as incorrect orders or incorrect stock levels. Having accurate and timely reporting with eCommerce inventory management software helps to ensure that orders are fulfilled correctly and that the inventory levels are kept up to date.

Multi-channel Integration is Powered by the Best Inventory Management Software Platforms

Multi-channel integration allows merchants to manage all their product inventory from a single platform. This eliminates the need to keep track of inventory in multiple places, and ensures that all channels, such as online stores, marketplaces, and physical stores, have access to the same up-to-date product information. Multi-channel inventory management also allows merchants to quickly and easily adjust their inventory and pricing across all channels, allowing them to remain competitive in the ever-changing eCommerce market. Additionally, it helps them to better manage their stock and to keep track of customer orders, ensuring that they are able to deliver the right product to the right customer at the right time.

Lot and Serial Tracking are Critical to Supply Chain Management

​​Lot and Serial Tracking helps businesses easily track and manage the flow of goods and products. This feature allows businesses to record, monitor, and manage the exact location of their inventory, as well as the expiration dates, production dates, and other important details. This helps to ensure that the business has the right amount of inventory, which results in better customer service and more efficient operations. Additionally, Lot and Serial Tracking allow businesses to quickly identify and resolve issues with inventory, which helps to reduce losses and avoid costly mistakes.

Robust Inventory Forecasting and Planning Can Grow Your eCommerce Business

Robust inventory forecasting and planning helps businesses accurately predict future inventory needs. This makes it easier to identify potential issues and plan ahead to avoid stockouts and other costly problems. It can also be used to determine the ideal order quantities and timeframes to ensure the availability of the right products at the right time.

Command Your Operations with Advanced Security and User Access Control

Advanced security and user access control help to protect the confidentiality of business information. With access control, businesses can determine who has access to certain areas or functions of an inventory management system. This allows business owners to limit access to sensitive information, such as pricing and product inventory. By securing their eCommerce inventory management software with advanced security, businesses can also protect their data from theft and malicious cyber-attacks. The ability to control who has access to inventory management data is essential in helping to secure a business’s valuable information.

Solve all of Your eCommerce Inventory Management Issues with SkuNexus

For eCommerce brands of any size, an array of challenges exist at the intersection of inventory, order management, and warehouse fulfillment. To counter this, the implementation of an inventory management system is mission-critical.

SkuNexus offers a suite of powerful tools that can help eCommerce companies manage inventory. Our integrations with major eCommerce platforms automatically synchronize product data and inventory levels across channels, so companies can ensure accurate and up-to-date information is available at all times. With these tools, merchants can also gain insight into their product performance and make informed decisions about stock levels, demand planning, and the entire supply chain. 

At SkuNexus, helping eCommerce businesses take, and keep, control over all their entire inventory is a core element of what we do. If you would like to learn more about how we can help your business optimize its inventory control and reap a host of other benefits, please contact our team to schedule a thorough product demo.