What is Inventory Management?

Instead, you take physical counts of the amount of inventory you have at the beginning and end of a given period. It takes your beginning inventory, adds new inventory that you purchased during that period, and deducts the ending inventory, which ultimately lets you know your COGS, or cost of goods sold. Still, as a smaller business, you might be able to get away with the spreadsheet approach to inventory control. But be ready for inevitable errors, longer hours, and inefficiencies. QuickBooks Online Plus is a one-stop robust e-commerce solution with an inbuilt inventory management feature allowing you to keep a finger on the pulse for all your business inventory. Safety stock offers an optimal solution without significantly increasing costs.

Ecommerce Warehousing With a 3PL

• These dedicated tools are fantastic for larger and more complex online stores, or simply for those looking to increase efficiency, and cut costly mistakes.
• The seller’s role is to attract customers to their online store, and when a purchase is made, the order is sent directly to the supplier for shipping.
• Your audit method should also be clearly defined, outlining the process and workflow.
• Internal audits are an important part of inventory management for your e-commerce store.
• In fact, there are on-demand warehouse and inventory management companies that handle this type of orders.

It basically Partnership Accounting removes the need to have an inventory of materials and stock. However, it will put pressure on you when it comes to keeping up with the demand. The above are some examples of how e-commerce inventory optimization boosts efficiency and reduces the costs of running a product-based business. This section discusses the process of e-commerce inventory management. Auction listings provide descriptions and sometimes even testing notes for each item’s condition. While store return auctions involve some risk, checking the lot descriptions, seller reviews, and any available quality guarantees from the platform helps in making informed bids.

Define your business needs

Even if you don’t sell perishable products, this method ensures no one item is sitting on your shelves for too long. The size of the storage space you need depends on the sizes of your products, what types of products they are, and the amounts you’ll need to stock at a given time. The benefits of holding on to inventory control can outweigh the downsides.

What are the best techniques for e-commerce inventory management?

The problem is, not everyone has the skills to try to manage inventory control with an Excel spreadsheet—especially the more complex your supply chain and sales process becomes. Another great way to manage your inventory stock is to setup a barcode system for your products. With a simple scan of the barcode, it allows them to net sales update the inventory and even know how many items are left in the inventory.

How to Manage Inventory If You’re Buying In Bulk

You may also be able to set up alerts when there are inventory level updates. The importance of e-commerce inventory management should be evident at this point. It plays a key role in maintaining the healthy cash flow of your company. A recent research report by McKinsey & Company revealed that over 90% of online shoppers expect product delivery in 2 to 3 days. If delivery takes too long, almost half of consumers will buy online store inventory management from another shop.