The Complete Guide to Ecommerce Inventory Management Systems

Carmen Fan
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You can’t manage what you don’t measure. That’s why an inventory management system is invaluable to the success of your ecommerce fulfillment, and we’ll discuss its importance in this guide. First let me define inventory management: it refers broadly speaking to all aspects which have anything at all related or connected with managing stocks for selling products on shelves after they’re ordered by customers online through stores such as Amazon Prime Now 24/7 delivery service where orders must be completed within two hours during prime time if not sooner due


Inventory management is the process of tracking your inventory, in order to make decisions on what products to sell. If you’re not sure if there are enough copies for everyone who wants them then it will be difficult when trying restock and stock up again! The benefits include knowing how many items exist at any time so that should never happen overnight because then people would go without their favourite thing – which defeats all purpose right? 




As your business scales and the amount of inventory you handle also grows by the day, you are likely to find it challenging to meet consumer demand without proper inventory control. You need an effective inventory management system to have enough items to meet any customer demand continuously. Inventory management comes in handy in the following areas:

Alerts you when to reorder

When getting started, managing your inventory manually may be easier, but as your business grows, you will realize how challenging that can get. For an established ecommerce business without an IMS, it is very easy to find that you have run out of stock when you think you have enough to meet demand. Inventory control ensures you are aware of when it is vital to restock. With a good IMS in place, you can have it configured to notify you when your stock is near or reaches a specific threshold.

Helps you determine how much to reorder

Inventory management further ensures you have accurate details of how much to reorder. It helps take the guesswork out of the process. That means every time you need to replenish, you are always assured of the exact number to order. This is very crucial, especially when there is a high demand for specific products.

Makes it easier to determine how long stock can stay in the warehouse

With an effective inventory management system in place, you can tell how long it takes for every item to be sold out. This is possible because an IMS keeps new stock records and tracks each until it is sold out. You can use this information to determine what products to replenish depending on how fast they are selling. 




best practice inventory management

There are many reasons why inventory control needs to be a top priority when running an ecommerce business. Here are the top benefits of effective inventory management:

Optimal stock levels

When you keep accurate and up-to-date inventory reports, it becomes easier for you to compare your inventory level with what is selling well, know which products need to be restocked and when to do that. This removes the need to rely on your memory or visit the warehouse to determine what is running low.

Reduced risk of overselling

There is a possibility of selling products that are out of stock when you don’t have an accurate report of your stock. Inventory management ensures you only sell what is available, and that can go a long way in helping you provide better customer service. For example, you can ensure delays shoppers experience by ordering out-of-stock products don’t hamper your business’s growth anymore.

Greater cost savings

To be successful in ecommerce, you need to make the right decisions when restocking. This ensures you have enough products to prevent stock-outs and keep the sales going. Further, this ensures you replenish fast-moving products. Inventory reports can help you determine which products are fast-moving to ensure there is enough to meet the demand. That way, it becomes easier to free up some cash to invest in other cores of your business that are crucial for its growth. 

Avoid stock-outs and excess stock

Stock-outs and excess stock can hamper your efforts to grow your business. Frequent stock-outs limit your ability to serve your customers better, which may trigger them to shift their attention to your competitors. On the other hand, excess stocks may require additional storage, which may come with an extra cost if you need to rent one. Accurate inventory control reports come in handy here in ensuring you have the most recent information about your inventory.

Make more profitable business decisions  

Your business’s ability to make profits depends on the decisions you make. For example, you are likely to make a greater profit by selling fast-moving products during trading seasons and flash sales events. You can only make such a decision if you have accurate information about your inventory. So you need to focus on good inventory management if you wish to make profitable business decisions.


Effective inventory management is vital for the success of ecommerce businesses. It ensures you have the right stock all the time through simple processes such as tracking. Further, it improves your ability to make profitable decisions. Thankfully, by utilizing software such as an inventory management system, you can know what to reorder and when to do that.

Speak to a Floship consultant today on how our logistics platform can optimise your inventory management processes

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