E-Commerce Business

If you have just ventured into the world of e-commerce business, you might know by now managing inventory for e-commerce is no cakewalk. Inventory management is crucial for business scaling and avoiding loss due to overstocking or understocking. Without a long term goal and a proper inventory management system that optimizes your inventory, you can’t expect to have a solid footing in e-commerce. Most entrepreneurs,’ new to e-commerce, often find it hard to keep track of their inventory as they lack crucial knowledge about inventory management. If you are among them, read on to find out more about inventory management.

What Is Inventory Management?

Inventory management is a method of keeping track of your stock. When it comes to e-commerce inventory management, the basics are the same as a traditional brick and mortar store inventory. Inventory management starts with sourcing your products, storing them, and ends with selling those items. It also informs you how much effect you have in your stock, where you should keep them, how long they should be in stock, and sometimes even determines those products’ price.

Read Also – Future Anticipations from Ecommerce Business from the Year 2021

How to Effectively Manage E-Commerce Inventory?

Managing inventory for an e-commerce business requires you to strategically project future stock requirements. Here are some useful pointers on how you can manage your e-commerce inventory.

Incorporate Inventory Software

Software and automation is a must for running an e-commerce business in this era. If you are still using pen and paper for your business, you might want to rethink your decision. Besides, when it comes to scaling up your business, managing inventory without software will not cut it for you. Manually syncing all the ins and outs of products and compiling real-time data will be a nightmare without software.

If you want to maximize your inventory management’s efficiency, invest in an inventory management system.

Categorize Your Stock Items with The ABC Inventory Method

ABC method will help you understand which products you need to prioritize in your stock. It revolves around three variables; categorizing each item of your stock according to their consumption value.  “A” indicates the highest consumption value of products over a certain period. “A” category products are usually of high value but have a low frequency of sale.

“B” indicates medium consumption value products; their prices are not as high. and sales are more frequent. “C” indicates the products that have low consumption value, but demand is highest for them.

For an e-commerce business for sports goods and equipment, heavy exercise machinery can be “A” category products, you sell them less frequently, but they have a high value. Simple workout equipment can be considered as a “B” category product. Sports shoes, water bottles, or sweatbands are sold more frequently, but they cost less than any equipment; you can consider them as “C” category products.

Read Also – 10 Innovative eCommerce Web Design Trends

Advantage of This Method in E-Commerce Inventory

If you apply the 80/20 rule for these three categories, it will be evident that 20% of your sale contributes to 80% of your revenue. This means most of your revenue comes from selling you “A” category products, and the rest comes from “B” and “C” category products.

You need to concentrate more on your A category product as your business revenue hinges on this group. You need to understand this direct correlation between prioritizing your stock items and revenue. Otherwise, you will blindly run after that 80% while the prime catalyst for your business loses its value.

You want to maximize your inventory management’s efficiency, invest in software or take help from an online platform. like trackahaul.com for successful inventory management for your e-commerce business.

Take into Account Seasonality

Most products depend on seasonality for their sales to grow. You need to take into account this seasonality factor whenever you are stocking your products. For instance, if you are running an apparel business, stocking winter gear during the peak of summer won’t do much for your business. You need an equal amount of foresight and strategic management for seasonality based business.

There are some effective ways that you can use seasonality to minimize inventory waste. For example, make sure you are fully stocked long before the peak season. And if you still have massive stock left in your warehouse near the end of the season, consider coming up with some promotional offer and season end sale.   

Barcode Scanning and Automation

Automation is a blessing when it comes to operating an eCommerce business that ships globally. If you have a huge stock of the product in your warehouse, it will be difficult to keep track of them. As a result, you might send the wrong package to your customer. A barcode identification system will ensure that this type of misplacement of the product stays at a minimum. Incorporating automation in other aspects of your inventory will reduce human error and ensure customer satisfaction.

Keep a Safety Stock

Safety stock is an emergency stash for business. It comes to the rescue when your regular supply chain faces a crisis. For instance, during the recent lockdowns, you might have had a hard time with your products’ supply and demand. If you have a safety stock set aside for emergencies, you will suffer less in such conditions.

You can adapt this formula for determining the scale of your safety stock-

Safety stock= (maximum daily usage X maximum lead time in days) – (Average daily usage X Average lead time in days)

Why Do You Need Safety Stock?

Lead time is the time-lapse between placing an order for stocking your inventory and receiving it. It determines how long you need to hold your stock without running out. If you wait until you run out of stock to place an order for restocking, you might have to wait a significant amount of time that can turn out devastating for your e-commerce sales.  Between your working stock and completely running out of stock, you need this buffer of safety stock.

This formula doesn’t provide a foolproof cushion against a crisis. Lead times can vary depending on circumstances, and for the calculation, we assume a suitable number that we calculate from previous lead time statistics.

The Bottom Line

Apart from these techniques, there are many other proven methods for eCommerce inventory management. You can incorporate any of them into your business. However, if a particular method works well for other businesses, it doesn’t necessarily mean it will be suitable for you too. You can come up with your own inventory management system for your business. Make sure you find the right one that will optimize your eCommerce inventory system.

Read Also – Why to Choose a PWA Development Company for your Ecommerce Business?


  1. you’re truly a good webmaster. The site loading pace is incredible. It seems that you’re doing any unique trick. Also, The contents are masterwork. you have done a excellent task in this topic!

  2. Hi there! This post couldn’t be written any better! Reading through this post reminds me of my previous room mate! He always kept talking about this. I will forward this article to him. Pretty sure he will have a good read. Thank you for sharing!

  3. You actually make it seem so easy together with your presentation however I find this topic to be actually something which I feel I would by no means understand. It kind of feels too complex and very wide for me. I am having a look ahead on your subsequent publish, I¦ll try to get the grasp of it!

  4. hey there and thank you for your info – I have definitely picked up something new from right here. I did however expertise several technical points using this website, since I experienced to reload the site many times previous to I could get it to load correctly. I had been wondering if your web hosting is OK? Not that I am complaining, but slow loading instances times will often affect your placement in google and could damage your high quality score if advertising and marketing with Adwords. Anyway I am adding this RSS to my e-mail and can look out for much more of your respective exciting content. Ensure that you update this again soon..

  5. hello!,I love your writing very much! percentage we be in contact extra about your article on AOL? I require an expert in this space to solve my problem. Maybe that’s you! Having a look forward to see you.

  6. An impressive share, I just given this onto a colleague who was doing a little analysis on this. And he in fact bought me breakfast because I found it for him.. smile. So let me reword that: Thnx for the treat! But yeah Thnkx for spending the time to discuss this, I feel strongly about it and love reading more on this topic. If possible, as you become expertise, would you mind updating your blog with more details? It is highly helpful for me. Big thumb up for this blog post!

  7. Have you ever considered about adding a little bit more than just your articles? I mean, what you say is fundamental and all. Nevertheless just imagine if you added some great graphics or videos to give your posts more, “pop”! Your content is excellent but with images and videos, this site could undeniably be one of the best in its niche. Superb blog!

  8. This is the right blog for anyone who wants to find out about this topic. You realize so much its almost hard to argue with you (not that I actually would want…HaHa). You definitely put a new spin on a topic thats been written about for years. Great stuff, just great!

  9. Hi, Neat post. There is a problem together with your site in internet explorer, could check thisK IE still is the market chief and a big portion of other folks will leave out your magnificent writing because of this problem.

  10. Hi
    Our multi-vendor marketplace development team helps you to transform your business idea into reality by simplifying online marketplace development for your business needs. We provide marketplace development services using cutting-edge technology to produce a more secure, scalable and user-friendly product. Choose eGrove Systems to get the most out of a marketplace service to enhance your eCommerce business.


Please enter your comment!
Please enter your name here