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Best practices of ecommerce inventory management.

Inventory management may be a systematic approach to sourcing, storing, and selling inventory — both raw materials (components) and finished goods (products). In business terms, inventory management means the proper stock, at the proper levels, within the right place, at the proper time, and at the proper cost also as price. That being said, Inventory management, sometimes, can be time consuming, challenging and irreparable, and It takes a huge toll on you if you sell on multiple channels like Amazon or Flipkart for instance.

Managing your inventory is integral to the success of your ecommerce business. Ineffective management of inventory may lead to a bad customer experience thus resulting in your capital getting dried up in inventory storage.

Inventory management for your ecommerce business should be one among your top priority because it defines your business volume. We’ll tell you why it should be handled with care as if the process were like treading on eggshells.

Why ecommerce Inventory Management Should be a top priority

Inventory management touches many parts of your ecommerce business. When you forgo inventory , you can’t forecast sales. You can’t efficiently get items to customers when they need them. Inventory management touches upon each nerve of your ecommerce enterprise. As an ecommerce business owner, your aim is to get the items to customers as and when needed, but this comes with a lot of troubles like too much inventory or little inventory that can affect your capital and sales.

Let’s look at some scenarios where inventory management is beneficial

Nothing is worse than telling a customer you can’t ship an item or your item will be delayed because seller actually doesn’t have it. Inventory management prevents overselling. Tracking the inventory in a timely manner will help you accurately list items stored in an inventory on your site or marketplace.

Tracking inventory means that employees are better positioned to help customers with this information , and customers can also check online for inventory levels, whether for online or in-store too. Thus, Ordering too much or too little inventory happens as a result of poor sales tracking. But if you track sales, you can anticipate how much inventory should be kept in storage and it helps forecast sales.

Keeping inventory at tabs helps you speed up moving of goods within your organization; moreover, you’ll have more control over your inventory and be able to track it over different locations. With these types of benefits, how can we achieve these benefits through inventory best practices? Once you set inventory management a priority, you then get to know what to see for several solutions.

These are best practices for ecommerce inventory management:

Centralized Inventory unit

But, if you sell on multiple sites, different marketplaces, then it is best practice to centralize your inventory in a concentrated system. Your ecommerce platform isn’t going to be able to handle it across a multichannel. A designed system might be a POS or ERP system, which is then integrated to your online platforms. This type of inventory management integration can make sure that inventory numbers are updated in real time as orders from all channels flow through.

Real Time Inventory

Inventory should be present in the warehouse when you sell. When it’s not, you run the risk of overselling. If you’re a seller at a marketplace, and you oversell, you can quickly lose your credential to sell on the platform again. Your account may be frozen for a few hours and even suspended. Your inventory management is capable of handling your entire inventory across locations.

Drop Shipping

Many sellers use drop shipping to prevent overselling in ecommerce business. Sometimes sellers don’t have to keep or procure inventory. Instead, they seek help from an external supplier. Drop shipping is a process in which a seller does not have to keep inventory on hand. Instead, they maintain a supplier who holds and manages the inventory including shipping.

Product variant

Variants, also known as matrix products ,are when you have multiple variances of one product. Let’s say you sell mobile phones. For one mobile, you could have multiple colors and multiple options in different sizes. Not only do you want to know how many variants you have, but also want to know how many options are available inside the variants.


You need to manage the product of number of items, number of attributes, and number of attribute options, and you have to manage each variant. Imagine how complicated it’s to manage tens or hundreds of variant products. Suppose, you need to choose an inventory management solution that handles variants easily. Stock keeping unit(SKU) helps you do this.

Multichannel Inventory

Selling in multiple channels can give you hiccups or troubles. Especially when you are an independent seller, who is selling on a single marketplace, you might need a small solution to get your inventory taken care of.

But if you are a seller, selling on multiple marketplaces, No matter where it’s sold, the type of item it is, or who fulfills it, your inventory must be updated in real time across all your channels. These types of sellers cannot rely on defunct ecommerce inventory solutions to handle all of these complexities. To see what a multichannel inventory management solution looks like, Check out Skartio.

(Disclaimer: This is one of the things that SKARTIO does as an ecommerce platform, and which is why we know so much about it). To know more, sign up on Skartio for a free trial today.




SKARTIO Commerce Cloud platform

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Aneesh Kumar

Aneesh Kumar

IT Analyst-Digital commerce, Blogger

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