The Importance of Managing E-commerce Inventory In Real Time


Managing e-commerce inventory in real time is one of the keys to success in running your business. There is a lot of science to it, but with good data management tools and robust inventory control software your store can grow as far as your ambition takes you.

A lot can go wrong if you don’t keep a good handle on your inventory processes. For managing e-commerce, inventory control is always an In-Real-Time affair, because orders can flow 24/7.

The Perils of Poor Inventory Control

Excessive warehousing space

If your products aren’t selling out quickly, warehousing space is a must-have. Maintaining a good flow of inventory means more efficient use of your warehouse space and will reduce overhead costs for things like rent and security maintenance.

Dead stock

Dead stock occurs when you have too much inventory for too long, because demand is lagging. It happens either because products have a limited shelf life, or because fads and styles come and go. Whether you can properly call something “dead stock” depends on the type and mix of products that you sell. High-dollar products will naturally stay in stock longer than lower-priced items. Managing e-commerce inventory will prevent dead stock, improve turnover and lower your carrying costs.

Increased tax liability

You’re required to pay taxes on the inventory that sits on your shelves–another great reason not to hold excess inventory. Making your inventory processes more efficient will also lower your taxes.

Potential for spoilage

If you deal in products that have a limited shelf life, the need to sell them in a timely fashion is even more critical. Effective inventory management will reduce spoilage and maximize the value of your investments.

Unhappy customers

While holding too much inventory is a liability in many ways, so is not having enough on hand. Having to show an “Out of Stock” label is a sure way to disappoint customers who were otherwise ready to hit the Buy box.

Why managing e-commerce inventory in real-time is so important

Automation for scaling up

When you’re just starting out in the world of e-commerce, it can be tempting to track and manage inventory manually. Many merchants naturally tend to want to keep a hand in everything, and also want to avoid the cost of specialized software. But the really smart approach is to adopt more scalable inventory management processes, and automations that will support your store’s continued growth over time.

Are you guilty of any of these manual practices?

  • Offline spreadsheets for tracking inventory data
  • Separate software systems that aren’t synced or integrated
  • A system that requires manual updates, or only performs them periodically
  • Tracking and fulfilling orders using paper and pencil

Visibility in real time

As product demand increases and inventory management becomes more complex, e-commerce managers encounter visibility challenges that manual processes cannot adequately control.

Visibility into multiple channels. When selling your products across multiple channels (Amazon, Etsy, eBay, etc.), all of them must be tracked on a continuing basis.

Visibility into inventory from multiple warehouses. As your business grows you will likely start partnering with more manufacturers and warehouses in order to meet growing demand from new customers or regional markets. When this kind of expansion occurs, tracking inventory by location becomes another layer to manage.

Data insights

Managing e-commerce inventory in a smart way requires data insights.

Good inventory control software gives ecommerce managers valuable insight into things like:

– whether inventory levels are fluctuating,

– changes in present and future demand,

– when to either reorder or scale back orders for products, and

– catch and fix any processes which may be breaking down.

A centralized system will pull inventory information from every source in real time, enabling you to leverage data for higher profits.

The two types of inventory control systems

For many e-commerce businesses just starting out, the traditional way for managing e-commerce inventory is the periodic inventory system. involves traditional, physical inventory counts.

In this approach, it’s easy for inventory counts to get out of sync with your other records. And while you can still complete physical inventory counts, a standard business may have to shut down for inventory counts and until reconciliations are completed.

Periodic inventory systems will only work for smaller businesses. A perpetual inventory system is much better suited to a modern e-commerce operation.

Today, managing e-commerce inventory requires a system that will record in real time every movement that a product makes.

  • Product sold> unit removed from inventory.
  • Products received from source> add them to stock counts
  • Items moved between warehouses > log the event in location tracking.

Perpetual inventory control is a product of more recently developed inventory management software. They’re now considered industry-standard.

Inventory control software such as that offered by Skubana comes with all of these smart inventory processes and policies built in.

Last piece of advice: make sure any inventory control software integrates with your other systems, especially if you sell through multiple channels.

If you use an omnichannel approach, with syndicated feeds to multiple marketplaces, managing e-commerce inventory becomes an even more complex challenge. Shoppingfeed’s omnichannel feed service comes with Zapier integrations, an easy way to connect the API of your inventory control software to all of your different sales channels, syncing all of them together in real time.

Shoppingfeed is a single platform to list, sync, and manage your products, inventory and orders, We connect e-merchants with the world’s largest marketplaces, adspaces, affiliate channels and shopping engines.