Ecommerce Inventory Management 101

Ecommerce Inventory Management 101

ecommerce inventory management 101

With more products being sold online than ever before, it’s important for businesses to know where their products are, organize them effectively, and understand when to reorder in order to avoid headaches around fulfillment.

Having an elevated inventory management strategy is pivotal for any ecommerce business that wants to rise above the competition and delight customers.

According to the Bureau of Labor Statistics, the number of operating warehouses has increased 10.4% from 2013 to 2017 – an increase of over 1,600 new warehouses in the U.S. alone. With that increase in warehouses comes a level of complexity that increases with businesses selling on multiple channels, like online and brick-and-mortar.

Like any addition to your technology stack, an inventory management system is best added after you’ve identified your requirements and needs for the technology — for both now, and in the future as you scale.

Unlike marketing and sales strategies that can be pivoted somewhat quickly, inventory management often takes longer to implement and needs ongoing maintenance and observation to ensure that everything runs effectively.

This blog post will walk you through the importance of having an inventory management system for your ecommerce website and the benefits that proper inventory management bring to your business.

What is ecommerce inventory management?

Ecommerce inventory management is the act of measuring the amount, location, pricing, and mix of products available from your business.

These could be products hosted in your own warehouse, provided through a third-party logistics fulfillment center (3PL), or housed in a separate business and purchased through dropshipping.

Through ecommerce inventory management, businesses know what products are overstocked, in stock, understocked, and out of stock.

Inventory management is closely tied to a company’s financials. In any given large warehouse, correct control over inventory gives you a birds-eye view of the amount of revenue potential from every single pallet.

From there, businesses can make more informed decisions around other strategies – like marketing – and adjust the demand for future storage or warehousing.

Logistics and analytics play a large part in inventory management. The amount of products you maintain in stock tells you about purchasing trends, seasonal trends, and fluctuating customer demand.

What are the benefits of managing your ecommerce inventory?

Disrupted inventory management can greatly harm your business — if customers aren’t getting their products in the time they anticipated, or if you’re selling products at a rate you can’t fulfill, you’re damaging the relationship that you’re attempting to build with your consumers and your suppliers.

Fixing mistakes associated with inventory management can cost businesses a lot: both in terms of lost revenue from sales and in the form of dead stock.

If you get your inventory management strategy right, your business will gain an advantage with more intelligence around buying behavior, in addition to a newfound understanding of where your products are in their lifecycle.

1. More efficient business practices.

Before the revolution of the digital industry, imagine the time it used to take warehouse workers to learn about an order, determine where the item(s) in the order were stored, and package the order for shipment.

What used to be a lot of labor hours can now live digitally — so long as your inventory management is correct.

If there are mistakes in your system, or pieces of stock aren’t accounted for, it can create headaches for warehousers. With a good inventory management system, you’ll save time and get more value out of your team.

2. Having an eye on all inventory.

One warehouse with one product may be a strategy for some, but businesses that are larger or that anticipate exponential growth need to have a plan in place for when they add products into their catalog.

This complexity increases tenfold when businesses opt for multiple warehouses, especially when it involves cross-border shipping.

An ecommerce inventory management system tells you where every product is and alerts you to when products are low in stock. An IMS also provides deep visibility into multiple warehouses, making it easier to manage warehouses near or far from each other like never before.

3. Delight every customer.

If your ecommerce website displays an item in stock, but it turns out that it’s not available, this creates a disjointed user experience for the shopper.

The more accurate your inventory management is, the more aligned you’ll be with the expectations that customers have around product availability.

This applies especially to businesses that sell on multiple channels like brick-and-mortar and Amazon. It’s important to know the final count that you have in inventory, and that that number adjusts as orders are being placed across channels in real-time.

4. Eliminate dead stock and wasted inventory.

While not enough inventory can be a problem, if you have an influx of product, you run the risk of not being able to sell all of it effectively.

Reporting (like historical sales reports, FBA reports) gives users data to make better purchase decisions so they don’t risk dead stock or wasted inventory in the first place. They feel more prepared and confident to make accurate reorder decisions based on sales data than with a manual spreadsheet.

Additionally, inventory management systems give you insight into when you’re running out of products and when the products you do have are nearing the end of their shelf life. This eliminates the need for extra storage costs and heavy discounting to get rid of inventory.

In the instances where you do need to discount product — whether it’s from a promotional or liquidation standpoint — the right ecommerce framework and front-end experience makes all the difference.

Consider adding a “sale” section to your website, or displaying markdowns on the product pages to incentivize shoppers to purchase.

5. Create returning customers with more re-order capabilities.

Often a shopper wants to return to a website and purchase the same product again. From a user experience standpoint, an effective inventory management system paired with invoicing and log-in capabilities of your ecommerce platform helps users easily get to their order history and re-up on what they need.

In combination with email marketing partners, BigCommerce stores can easily create email and marketing campaigns that revolve around product repurchasing.


Traditional brick-and-mortar retail inventory was managed in a simpler manner, because there was only one channel to sell through: the storefront.

In the age of ecommerce and multi-channel selling, however, things get a bit more complicated — so it’s even more important to use technology to understand what your supply chain looks like.

Modern brands now have numerous channels to sell through — brick and mortar, ecommerce storefront, marketplaces like Amazon, and social media.

If a product gets purchased on one channel, the inventory numbers need to match across all channels. Inventory management software, paired with accurate channel management, helps brands achieve this.

Enterprise brands and businesses with a large catalog of SKUs cut down on costs and corner the marketplace with an effective handle on their inventory management.

The front- and back-end experience for any purchase should always be optimized to satisfy the end customer — which is where BigCommerce comes into play.

With API-first and microservices-architecture capabilities baked into the platform, BigCommerce is the leading SaaS solution for mid-market and enterprise brands.

In an evolving digital world that demands innovative commerce and content experiences, BigCommerce stands out as the limitless option.

In partnership with SkuVault, BigCommerce creates an elevated experience from engagement to fulfillment — all by displaying the right products eloquently on the front end, and managing the inventory effectively on the back-end.

To learn more about the BigCommerce and SkuVault integration, visit our website.  

This is a guest post written by our cloud-based eCommerce platform partner BigCommerce. Corinne Watson is a writer and researcher at BigCommerce, where she works directly with agency and technology partners to bring their tools, services and ideas to the commerce industry at large with educational content. When she’s not working, she’s creating and designing for fun online.

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