E-commerce Inventory Management: A Step-By-Step Guide

Managing inventory without the relevant software is fine if your online shop is still in the early stage. Audits are a crucial part of e-commerce stock management, key to maintaining inventory accuracy. The best practice is to perform audits regularly, such as on a daily, weekly or monthly basis. By selling the oldest items first, you can avoid holding too much obsolete inventory, such as fashion items from past seasons.

• It’s not an end-to-end order, inventory and shipping management system like many inventory solutions, nor is it as pricey as the competition.
• To help you get the right amount of inventory to the right place at the right time, leverage AI technology throughout the various steps of the inventory management process.
• As your business and needs grow, you’ll most likely need to move from a spreadsheet to a specialist piece of software.
• Click on the links below to jump to a specific topic with detailed guides and information.

Retail Inventory Management Best Practices

As you plan for orders of new stock, pay attention to how long it takes your suppliers to deliver the items you need. If you run out of a certain product, it’s important to update your website immediately. When customers place orders and pay for products but fail to receive them in a timely manner, they may turn to other sellers. Ideally, your cloud-based inventory management software updates your website automatically, but you may want to put fail-safes in place to make sure this happens reliably. The JIT inventory method is most commonly used in manufacturing, but it can apply to ecommerce stores.

Inventory tracking

Inventory should be inspected as it arrives at your warehouse facilities, but quality control should also be prioritized throughout your handling, storage, and shipping processes. This includes proper packaging and working with reliable shipping partners who handle your inventory with care. To help you get the right amount of inventory to the right place at the right time, leverage AI technology throughout the various steps of the inventory management process.

• These platforms come with an array of functionality, so the one that’s best for you will depend on the ecommerce platform you use, as well as the unique needs of your business.
• Broken machinery can halt to the whole process, so take care to monitor your equipment and catch breakdowns immediately.
• The benefits of owning an online store are plenty, including passive income.
• Consider also adding a blog to Shopify store — just imagine reading about a product and then being able to purchase it right there and then.
• Setting your reorder points means you need to spend less time trying to manually monitor what needs to be reordered for every purchase period.

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We researched reviews from real users to get their opinion of each software provider. Extensiv provides ticket-based customer support and an extensive online knowledge base. There are many different kinds of inventory management that you can use depending on the type of business that you run, your industry, and your goals. online store inventory Another metric you should be aware of when managing your inventory is your inventory value, or the dollar amount your on-hand inventory is worth. Knowing your inventory is important not just for your financial statements but it gives you insight into how much profit potential you have sitting in unsold inventory.

Pros and Cons of Starting a Dropshipping Business

Tidiness will also help you to keep an eye on low stock levels and see where there’s available space when new product shipments arrive. Inventory freshness is also known as the “first in, first out” (FIFO) method. With FIFO, you organize your products with the oldest products at the front and new inventory closer to the back. This method is especially important if you sell perishable https://www.bookstime.com/ products, like food or makeup, to minimize the chance you’ll get stuck with expired products. Even if you don’t sell perishable products, this method ensures no one item is sitting on your shelves for too long. Having a system for inventory management and analytics ensures that sales and returns don’t slip through the cracks, and makes it easier to audit what you have.

While I didn’t use one at my store, some POS systems, like Lightspeed, have PO features that let you create and manage POs right from your POS system. Some systems even include vendor directories to manage vendor contact information, automated PO creation at set stock points, and receiving tools with POS data built in. First-in, first-out inventory management, also known as FIFO, is one method to assign costs to ending inventory.

With AI, you can automate tasks, gain valuable insights, and make your operations more efficient. No matter what inventory management techniques your business chooses to use, it’s critical to keep an eye on your operations during every phase of inventory management. Annual counts are year-end counts of your entire inventory for accounting and tax purposes.

• Inventory management software helps all types of businesses automate inventory processes, operate efficiently and increase profits.
• Cross-docking is a technique whereby a supplier truck unloads materials directly into outbound trucks to create a JIT shipping process.
• ShipBob is a leader in third-party fulfillment and logistic (3PL) services.
• Without access to integrated tools and data, you could easily end up ordering too much or too little, defeating the purpose.
• Order too few items and your store’s reputation might take a hit when orders cancel due to lack of supply.

FAQs About Inventory Management

• Track and review each step of the process in order to minimize out-of-stock and overstocked inventory.
• E-commerce inventory management doesn’t simply end when the goods leave your warehouse.
• Cassie is a deputy editor collaborating with teams around the world while living in the beautiful hills of Kentucky.
• Sometimes, this is out of your control – like when there are issues in the supply chain, for example.
• This protects your business from easily avoidable problems like overselling online.

Robust, industry-specific inventory management software can cost well upward of $100 or even $300 per month. Companies like Zoho also offer free inventory software options that can be a great launching point, as long as they integrate with your existing software ecosystem. Inventory management software is a program that tracks how much inventory you have in stock, how much you’ve sold and where each item is located. After signing up for an account online, you’ll add all of your inventory items to the system or import a list. From there, you may fill out purchase orders and track sales from within the software. Inventory management software automatically tracks how much inventory your business has on hand and when it’s time to reorder.

To make money with dropshipping, you need customers, but you can’t expect them to come to you automatically. You’ll have to come up with a plan for successfully marketing your store and the products that you sell. Dropshipping inventory management encompasses where your inventory is located, the amount of inventory you have, and what the supplier maintains in their inventory. There are different ways to track inventory for your business, which can include using a spreadsheet or an inventory management app. Since inventory management software isn’t as universal as some other types of business software, we also weigh a product’s ability to fill a particular niche or accommodate a specific industry.