A Quick Guide To Ecommerce Inventory Management

Guest Post

Ashley Brown is the Partner Marketing Manager at Skubana. She’s passionate about people, thinking outside of the box, and ecommerce!

For your ecommerce business to be sustainable, profitable, and scalable, you need to know where your stock is located, have an accurate accounting of its inventory, and know when to reorder. A poor inventory management strategy can make it impossible for a business to grow or even maintain. Having an effective inventory management system in place will prevent these inventory issues from occurring and maximize future profits.

What Is Ecommerce Inventory Management?

Ecommerce inventory management is the process of tracking every stocking item in detail. This means you know how many items you have, where they are, their pricing, and when you need to purchase more to keep stock levels optimal.

Challenges Most Ecommerce Shops Face With Their Inventory Management

Modern ecommerce business owners deal with more complexity than they ever have. They deal with multiple stocking locations, multiple sales channels, customers demanding the quickest possible shipping, and more. This complexity adds challenges that these shops must handle.

Lack of Visibility

Storing your products in multiple warehouses and selling them across multiple sales channels can add a lack of visibility to the challenges an ecommerce store already deals with. Without visibility across your entire inventory, forecasting and knowing what decisions to make and where you need to make them is difficult.

Siloed Warehouses and Channels

To grow and handle customer orders closer to their locations, adding warehouses is a necessity. And with customers using more and more sales channels and ecommerce platforms to find the products they need, having products on multiple storefronts is no longer an option. The problem with all these options is that many times they end up being siloed and managing them requires special attention which a busy ecommerce business may not have time for.


When sales traffic spikes, an ecommerce shop may not be prepared and could experience stockouts on exactly those items that are becoming popular. This can cause shipping delays and disappoint your customers.

Overstock and Deadstock

Overstock is another problem that online retailers run into, especially with seasonal products. Deadstock is even worse. Both can cost ecommerce business profits in the form of more storage costs and capital that is locked into products that aren’t moving.

Stock Locations

Setting up a system of stock locations is important to keep products and orders flowing smoothly. An optimal automation system will take sales frequency, size, quantity, and other factors into account when assigning stock locations. Without accurate inventory management, stock locations are just guesswork. 

Missing Safety Stock

Safety stock protects an ecommerce shop from running out of products when the inevitable happens like when demand suddenly spikes or a supplier has delays. With the right supply chain formula, it is easy to calculate the safety stock you need, but the formula only works with accurate inventory counts and tracking.

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5 Benefits To Leveraging Ecommerce Inventory Management System

Tracking inventory to keep stock at optimal levels can be difficult without help. Fortunately, the right inventory management system can help in multiple ways.

1. Consistent Stock Counts

Consistent stock counts are a major key to inventory management. Real-time inventory management systems will ensure that stock counts are correct at every one of your locations increasing optimization, preventing overselling, and decreasing overstocking.

2. Safety Stock Level Monitoring and Setting

Calculating safety stock levels is important but can be tedious and time-consuming. Inventory management systems will forecast safety stock levels based on the sales of products over time and adjust those levels when sales trends change.

3. Automatic Reorder Points

Setting reorder points and automatically issuing sales orders is an important part of what ecommerce inventory management systems do. Instead of guessing when to reorder stock, you can just be sure it will be ordered when needed without any human intervention. Especially for multi-channel sellers, it’s important your Amazon, Shopify, Ebay, BigCommerce, Etsy, ect. orders all all synced in order to streamline business.

4. Accuracy Across Multi-Sku Inventory and Multi-Warehouse Storage

Accuracy in your inventory is critical to ecommerce success for many reasons. It prevents angry customers, lost sales, and extended lead times. An effective inventory management system will manage the demand across multiple locations and control your inventory levels better than manual processes ever could.

5. No Human Error

Software should be used where it functions better than a human. In the complex process of inventory management, inventory management solutions will eliminate human error.


Managing the inventory of a multichannel online store is not easy. The challenges only grow as popular new sales channels pop up or a business expands into multiple locations. But with the right ecommerce inventory management system, retailers can bask in their success with less of the growing pains.