Inventory Management – How To Set Your Ecommerce Store Up For Success

By Rodney Laws | Business

Jun 20
Inventory Management - How To Set Your Ecommerce Store Up For Success1

Stock, delivery, returns, invoices, payments – keeping on top of what’s going in and coming out of your ecommerce business is an endless task – made all the more challenging as your business begins to grow. If you’re eager to get on top (and stay on top) of your ecommerce inventory management this year, then read on as the ecommerce experts at Expandly take you on a journey to inventory management made simple.

Back to basics: what is inventory management?

Inventory management is all about knowing how much stock you hold and where it is (both physically and in the order journey), and then using this information to plan your future stock.

Why is inventory management key to your store’s success?

Having accurate stock levels on Amazon and eBay is great, but inventory management can achieve so much more than that. Keeping accurate, in-depth, and live inventory data can help your business to grow customer numbers, sales, and profits by:

Ensuring you never sell out

Out of stock items will send 67% of customers to your competitors for good. Live and accurate inventory data tells you how much stock you have left and how long this stock should last for – enabling you to reorder stock at the right time to avoid selling out or overstocking.

Ensuring you never oversell

Perhaps even worse than selling out is allowing a customer to order and pay for an item that you don’t hold in stock. This is bad for your customer service, brand, and reviews and is easily avoided with proper inventory management.

Improving your cash flow

Inventory management can also enhance your ecommerce cash flow – by giving you the data to identify any slow-moving stock, set reorder points, and place a value on your warehouse’s contents.

Helping your strategy

Proper inventory management also gives you the necessary data to make informed business decisions such as what product to buy more of, what products to run marketing campaigns on and what products to put into the sale and never buy again.

Keeping you sane

Running an ecommerce business can be a busy, stressful, and endless task. Having a handle on your stock levels, ecommerce SKUs, and product performance makes ecommerce life a little more enjoyable.

Inventory management – setting your store up for success

So, how do you go about implementing an inventory management system that sets your online store up for all of this success? Well, let’s take a look.

Inventory management – the essential information

First, you need to understand the essential information required for a thorough ecommerce inventory management system. This includes the:

  • Stock available for purchase
  • Stock awaiting shipping
  • Stock that’s been damaged or lost
  • Cost price
  • Listing price
  • Time spent in your warehouse

Inventory management – the essential actions

Next, you need to store this information in a format that is easy to update, access, and report on. You can do this either through:

1.    Manual inventory management

Using a spreadsheet, record all of the above information and update it (and your sales channels) as soon as anything changes.

2.    Inventory management software

Professional, high-volume, or growing ecommerce businesses will do best using ecommerce inventory management software that sits between you and your sales channels, shipping carriers, and accounting software to collate, order, update and report on this information automatically.

Inventory Management - How To Set Your Ecommerce Store Up For Success

Inventory management – the essential considerations

But that’s not all. To really excel at inventory management, you need to consider the following:

Reorder limits

Use all of your new data to accurately predict when products will go out of stock – allowing you to set reorder alerts that prevent you from overselling, selling out or overstocking your warehouse.

Bundles and kits

If you sell some of your products as part of a bundle, you need to remember to update the stock numbers of the individual items as well as the bundle manually or by using inventory management software to do this for you.


No one likes to think of returns, but it’s important to decide how you’re going to reallocate returned stock to your inventory management process. Will it be destroyed, resold, or reduced?

Multiple sales channels

If you’re multi-channel selling on Amazon, eBay, and your own ecommerce platform (for example), inventory management becomes a little trickier. Manual inventory managers will want to ring-fence stock to avoid the worry of overselling. Those using inventory management should be able to benefit from live stock syncing between sales channels – allowing you to open up all of your stock without fear of overselling.


Finally, you want to create a number of different reports that will help you to understand all of your data and plan for future sales, marketing campaigns, and business strategies.

Inventory management – the essential tools

Finally, for the ultimate store success, you might want to consider using these ecommerce tools alongside your inventory management software or spreadsheet.

Additional staff

If you’re going down the manual inventory management route, you may need additional staff to stay on top of things during peak periods (such as Christmas, sales, holidays etc.)


Once you’ve got your inventory nicely ordered and accounted for, it’s time to get your finances in order. Xero’s cloud-based accounting is a user-friendly platform that allows you to do this, plus with the ability to automatically send sales orders from your sales channels into Xero, it couldn’t get any easier.

Multi-channel ecommerce software

Finally, many multi-channel management platforms include inventory management tools within them – enabling you to combine the costs and effort of listing, order management, inventory management, shipping label printing, and sending sales orders to Xero, into one convenient dashboard.

Final thoughts

Good inventory management is good business sense. Outstanding inventory management is what can set your business apart – you just need to know how.

About Expandly: Expandly multi-channel ecommerce inventory management software brings you essential inventory management tools alongside multi-channel listing abilities, order management, shipping label printing, and Xero integration. Let us show you how with a free inventory management software demo.