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Role of Inventory Management Module in an Online eCommerce Platform


Inventory management is a vital aspect for eCommerce businesses which is quite a time and effort-consuming task. Efficient, cost-effective, and accurate inventory management directly impacts the cash flow and customer satisfaction of any eCommerce business. Keeping the inventory updated across all listed platforms is required to successfully run an eCommerce marketplace, which becomes even more vital during the peak selling season.

Inventory management, in reality, is a careful balancing chore, where business owners need to ensure they have sufficient stock to not run out of a product while also making sure the stock is not in excess being dumped in the warehouse.

Implementing the best practices for inventory management provides full visibility of every phase to the entrepreneurs and even prepares them for the unexpected. If not executed correctly, businesses may run a considerable risk of failing to meet customer demands and eventually losing money.

What is eCommerce Inventory Management?

The simple process of sourcing, storing, tracking, and shipping physical products is referred to as inventory management. It can be leveraged by eCommerce businesses to increase efficiency and reduce operational costs. Efficient inventory management requires real-time information on the available stock, its price, and how long to keep it to make sure there is sufficient stock to fulfill orders.

As the business scales and the number of products increases, it becomes more challenging to manage inventory. Therefore, informed forecasting along with insightful comprehension of the business is required to identify which products are in stock, overstocked, understocked, and out of stock. And, all of these can be achieved with the help of the right inventory management system that can seamlessly fit into the supply chain management.

Common Challenges of eCommerce Inventory Management

No matter if you are a new online store, a small business, or a veteran online retailer, any business can fall prey to the challenges of eCommerce inventory management if not handled properly. Knowing these challenges ahead of time and the right approach to address them can help solve them before they become huge problems and hindrances to the successful running of the business.

Below are some of the most common challenges encountered while managing the eCommerce inventory affecting the growth of the business.

Overstocking & Overselling

It is essential for eCommerce businesses to grasp the purchasing patterns of their customers to prevent overstocking and overselling. Overselling refers to when a business sells the last of a certain product to multiple buyers and overstocking is when a business has bought too much of a certain product.

Overselling eventually results in order cancellations which negatively impacts the customer experience and satisfaction, whereas, overstocking diminishes the profit margin of the products. Forecasting accurate demand is the key to stopping this cycle. Automated inventory management is an effective way to precisely forecast the demand and how much stock will be required in the upcoming days or months.

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Unsynced Inventory Across Channels

At the outset, businesses start with a single sales channel and a single warehouse to store inventory. As the business scales, multiple online sales channels like marketplaces, social media platforms, etc., and warehouses are required to keep up with the business requirements. However, it becomes difficult to manage the inventory and sales via multiple channels.

Receiving an order for an out-of-stock item reflects that the sales channel is not in sync with the updated inventory. This is a common challenge for businesses that are aggressively expanding to new sales channels. A proper inventory management system will be required to keep track of multiple warehouse processing orders, how much stock is left in the inventory, and so on.

Lack of Data Insights

This is another major challenge for eCommerce businesses when there is an increase in product demand and inventory management becomes more complex, eventually affecting future strategies. Merely having the access to the inventory data is not sufficient, having the knowledge and comprehension of utilizing that data to its fullest is also required for business owners.

As an example, ordering products from vendors takes a certain amount of time to deliver. However, the amount of time is not the same for every vendor. Some might deliver the product the next day, while some may take a week or so, which will certainly affect the delivery time to your end customers.

So just having the data with you is not sufficient, business owners should also have the know-how of using those insights for the smooth functioning of their business.

Common Practices for Seamless eCommerce Inventory Management

Considering there are no two businesses alike, there is no “one size fits all” strategy for efficient inventory management. However, the adoption of quality inventory management strategies is required to streamline the operations in an eCommerce business. Let’s have a look at some of the most beneficial and useful inventory management strategies out there to ensure seamless business operations.

Choose the Right Inventory Management Technique

There are multiple inventory management techniques that offer greater flexibility for eCommerce of various sizes and industries. Common techniques are:

1. Just In Time

As the name indicates, this technique involves stocking the product each time a customer requests it so that the volume of inventory is equal to the orders fulfilled. Needless to say that this approach offers huge cash savings, however, it can also affect adversely if the demand rises unexpectedly.

2. First In, First Out

FIFO indicates that the items received first at the warehouse are to be dispatched first to the end customers. This approach helps businesses to keep the stock as fresh as possible by moving the older stock to the front for dispatching. FIFO is ideal for food and beverage businesses where they deal with perishable items.

Implement Robust Inventory Management and Get Complete Control Over Your Stock & Beyond

3. Dropshipping

Also referred to as the “anti-inventory” inventory management model, this approach involves keeping the shipping to the manufacturer itself. As a client places an order, businesses fulfill it from the manufacturer and ship it to the customer. Beneficial for businesses that are new or do not wish to invest in a warehouse or storage facility.

4. 3PL (3rd Party Logistics) Fulfillment

This inventory approach involves outsourcing the fulfillment to a third-party service provider who is well-versed in managing the inventory and monitoring compliance. 3PL is ideal for businesses that do not wish to invest their time in order fulfillment and instead work on expanding their business.

Calculate Inventory Turnover Ratio

Knowing the inventory turnover ratio helps businesses to forecast and ensure that the products remain in stock. The number reveals many insights into the business’s performance and is also used to determine the next steps of the business like forecasting, stocking, sales, and marketing. It also helps business owners decide whether to scale the inventory or not, depending on the product’s performance.

Initiate Barcode Scanning of Products

Barcode scanning is an inexpensive way to track the status of the products that are received, moved, shipped, or altered. This is a recommended practice as the manual approach is vulnerable to errors, inaccurate SKU numbers, and mistyped inventory data which can result in huge expensive losses. This becomes more tricky if the business expands beyond a few products.

Figure Out Safety Stock Levels

Understanding the safety stock levels safeguards businesses by assuring the minimum level of stock required at all times. This number should be maintained by all business owners unless they are dealing with food or perishable items. This minimum stock level depends on a couple of factors – product demand and time taken to restock the item.

Plan Seasonal Inventory

The sales of your products are not similar at every time. Sales are at their peak at certain times like Black Friday and Christmas. Therefore, it is important to plan your inventory as per the seasonal picks and drops, otherwise, you have the risk of having surplus stock or not having enough stock.

Benefits of Using an Inventory Management System for Your eCommerce Business

Till now, one thing is quite clear; managing eCommerce inventory is not an easy task. There are multiple challenges such as orders, inventory, shipping, accounting, and many more. Fortunately, there are a number of systems available that make all the mess and chaos easier to manage. They are highly beneficial for the eCommerce business for several reasons, including:

Real-Time Stock Counts

Effective inventory management systems provide data on real-time inventory which is an important ingredient for the success of the eCommerce business. It increases gross profit, improves control of allowances, reduces losses, and minimizes waste. As soon as an item goes out of stock, the business owner is instantly notified to respond accordingly.

Business owners can then evaluate the insights and decide when to refill the stock to meet the ongoing goal and targets.

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Automatic Reorder Points

This is another remarkable benefit of implementing an inventory management system. Accurate reorder points can be identified automatically and easily with an inventory management system notifying business owners when restocking is required. What’s more, these systems also allow enough time for the new stock to arrive before the in-stock items are sold out completely.

All of this enables businesses to optimize their warehouse spaces easily, eventually reducing inventory costs.

Safety Stock Level Setting

As discussed above, maintaining a safe stock level is important for eCommerce businesses to mitigate the risks associated with the out-of-stock situation and be prepared to fulfill the orders in case of any unforeseen circumstances in demand and supply. An inventory management system helps monitor safety stock, identifies inaccuracies in forecasting, and avoids stock-outs to keep customer satisfaction high.

Many inventory management systems are also incorporated with features to automatically place new purchase order requests once the safety stock number is reached.

Accurate Inventory Across Channels & Warehouse

One of the most crucial as well as overlooked and undervalued components of eCommerce business is accurate inventory levels. However, an eCommerce inventory management system tracks and keeps records of accurate inventory levels across all the sales channels and warehouses. It tracks the fulfilled orders on all the sales channels and manages the inventory levels in an easier and more efficient way than manual or excel programs.

The eCommerce inventory management when done manually, results in human errors which add up and costs the company profits in the long run. Automatic systems, on the contrary, are self-sufficient and deliver accurate and reliable results in less time and energy from business owners.

Yo!Kart – A Powerful eCommerce Platform with Robust Inventory Management Module

Yo!Kart is an award-winning eCommerce platform with an impeccable inventory management system that empowers business owners to run their entire multi-vendor eCommerce marketplace from a single interface. It helps automate and improve inventory practices and help keeps customers happy by always having the goods they want in stock.


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The inventory management module in Yo!Kart addresses every need in supply chain management and allows businesses to expand and grow across multiple sales channels. The suite of inventory management and control features including multi-location inventory management, warehouse and fulfillment management, automated stock replenishment, lot and serial tracking, and cycle counting makes it the perfect eCommerce platform.

It helps businesses to cut down on labor costs through its powerful features by pricing the products effectively while delighting the customers with excellent service. There is a lot more that goes into inventory management than just keeping the track of stock. And, to ensure optimal availability at the right costs, businesses can rely on Yo!Kart.

The inventory management system of Yo!Kart is built with keeping the entire eCommerce process in mind providing a holistic approach to the entire supply chain. Yo!Kart provides visibility and support to your business so you can provide your customers with an incredible shopping experience.

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