Why eCommerce Businesses Must Get Inventory Management Right

Written by
Get your free ebook. Pick an Inventory Management System that will work for you. Here's all you need to know. Click here to download the ebook now..
Written by
3 Minute Read
Share Blog:

With the ability to facilitate 24/7 online selling for both B2B and B2C operations, it is no wonder eCommerce has rapidly taken off. By selling through online channels, consumers have easy access to niche products that otherwise would not be available in brick-and-mortar stores or products that are not available to them locally. There are many advantages of eCommerce selling, however this can also present certain logistical challenges for distributors and retailers, this is why it is imperative to have a sound inventory management system to help smooth this process.

With an estimated $1.1 trillion of capital tied up in inventory stock, accounts receivable and accounts payable, you would think companies would put more emphasis on this process. However, merely up to 43% of businesses do not track their inventory stock at all, or use outdated manual processes. Pen, paper and spreadsheet businesses fail to realise that inventory management is not just a beneficial internal process for keeping track of your inventory stock, it can directly affect your relationship with your customers.

Real-time inventory management

Real-time inventory management can play a crucial role in keeping customers happy and ensuring that they stay loyal to your company. To avoid out of stock messages, an item should be subtracted from the inventory stock as soon as it is sold. Likewise, new items must be updated in the list of inventory stock as soon as they are procured and shipped. This not only ensures more accurate and timely coordination of inventory stock levels in the front-end systems, it also helps in tracking products from the moment it enters the inventory stock and is shipped till the very minute it reaches the customer.

Best practices involves unique barcodes, Radio Frequency Identification (RFID) tags, or Quick Response (QR) codes linked to automated inventory management systems. This allows distributors to scan each product when it enters the inventory stock and make its status visible on the system at all times.


Analysis of inventory stock levels in real-time through an automated system makes it easier for sellers to better forecast for specific periods when the demand for a product is high. Having such a system in place allows companies to schedule the procurement of products and avoid being understocked or overstocked. For example, having this data readily available, an eCommerce retailer can prepare for seasonal peaks and dips in demand for products, helping them optimise sales and marketing campaigns for these periods.

Keep organised

Real-time inventory analysis is also particularly helpful in keeping a company stay organised. For example, with this data your company can help identify problem areas within the supply chain where delays may occur, and why. Distributors can accordingly take the right measures to solve potential issues and ensure a smooth shipping process. Real-time inventory management can help avoid errors in processing orders, that can also provide customers with transparent information on product availability.

Customised and integrated system

With the increasing complexities of operating an eCommerce store, it is very important to have a way to track inventory stock and orders. Better inventory management systems will enable your company to manage all your data on different sales channels, from online stores, marketplaces and offline inventory stock from one integrated dashboard. Your data gets synchronised across all these sales channels in real-time.

It is important to realise that effective multichannel inventory management is virtually impossible if you are still keeping track of inventory stock with spreadsheets. A robust inventory management system allows you to keep track of inventory stock across multiple channels, automatically update levels as sales are made, and allocate inventory stock based on demand for each individual channel.

Ideal inventory management is when you create a plan that ensures that there is neither a shortage nor a surplus of the inventory stock that these best practices help you to achieve, keeping both your consumers happy, fostering repeat custom, and your company healthy and profitable.

More about the author:

Share Blog:
Melanie - Unleashed Software

Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.

More posts like this

Subscribe to receive the latest blog updates