Inventory management systems in ecommerce save time and money.

Inventory Management in Ecommerce: How It Saves Money

An effective inventory management system for ecommerce can influence business elements like cash flow, operations, and marketing.

Inventory management in ecommerce can make or break any online enterprise, especially as ecommerce sales grow. Online sales rose 2.7% — to $257.3 billion — in the second quarter of 2022 alone, according to the U.S. Census Bureau of the Department of Congress. Meanwhile, Morgan Stanley forecasts that ecommerce sales will make up 27% of retail sales in the U.S. by 2026.

Riding that growth wave will mean taking on one of the most important aspects of online business: ecommerce inventory management. An effective inventory management system for ecommerce can influence crucial business elements, including cash flow, operations, and marketing strategy. And more importantly, inventory management strategies can save you money.

1. Ecommerce inventory management prevents overstocking and overselling

Overstocking and overselling are some of the most harmful consequences of a lack of inventory management in ecommerce. But with accurate inventory data, you can maintain stable business operations.

Overstocking happens when you purchase more of a certain item than you sell. Overselling occurs when you say you have more items in stock than you do and allow customers to buy them anyway. Both are the result of inaccurate ecommerce inventory management and forecasting.

Too much inventory can result in a pileup of unsold products (also known as “surplus” or “dead” stock). Overstocking can take a huge chunk out of your bottom line, especially if surplus items expire. It can also significantly increase storage costs and the total amount of cash you have tied up in the investment.

On the other hand, having too little inventory and completing sales anyway can significantly affect customer experiences. The result could be increases in refunds, canceled orders, poor reviews, customer disputes, chargebacks, and bank fees if you fail to deliver the items you claimed to have.

But an inventory management system for ecommerce can decrease the likelihood of those events. A hallmark of ecommerce automation software, the right system can give businesses better inventory control and more accurate stock data. And if the system can update stock across stores and platforms, you can save money on the consequences of having or selling too much.

2. Ecommerce inventory management supports better customer experiences

Customer satisfaction plays a significant role in the success of every ecommerce business. Merchants and business owners need to ensure customers have the best online shopping experiences to gain their loyalty and raise their upsell or cross-sell potential.

You have a 60%-70% chance of selling to an existing customer and only a 5%-20% chance of selling to a new customer, suggests a widely published customer retention statistic based on findings in the book “Marketing Metrics.”

Converting and keeping customers will be easier for businesses with ecommerce inventory management systems. Fulfillment and inventory issues can significantly harm customer retention.

A Voxware survey of 500 consumers found that over half of them are much less or less likely to shop with a retailer if items don’t arrive within two days of a delivery date. Furthermore, 16% of consumers would stop shopping with a retailer if they received an incorrect delivery just once.

You can prevent these issues by implementing an inventory management system for ecommerce. Proper inventory tracking allows an ecommerce business to display actual inventory statuses on its website and keep customers from disappointment. Overall, accurate product listings can help build customer trust and lead to greater profits.

3. Ecommerce inventory management can maximize sales across channels

While multichannel selling can give you the advantage of a wider market reach, it can complicate the inventory management system. This is where an ecommerce inventory control solution comes in handy. It eliminates the need to update or reserve inventory in multiple channels manually.

Without a centralized management system, displaying an accurate stock count for each sales channel is difficult. And let’s say you manually update your inventory on each channel but have more demand on one platform than another. Customers on that platform may see items out of stock and shop with other businesses.

There are many ecommerce inventory management solutions on the market that come with various features and pricing plans. The right solution uses multichannel inventory sync capabilities to take the tedium out of inventory management.

Capabilities like this can help you track inventory levels by sales channel and instantly update your ecommerce accounting software when you cancel or refund orders.

4. Ecommerce inventory management helps you oversee multiple inventory locations

As an ecommerce business grows, it may need to distribute inventory across locations to meet customer demand in more markets. But overseeing multiple warehouses can be a challenge in itself.

So ecommerce business owners need a clear and comprehensive inventory management system to maintain a smooth and integrated fulfillment process. Workers at each branch must also follow the same workflow and regularly report inventory levels in their respective sites.

An inventory management system for ecommerce can also make large-scale supply chain management more efficient. Multichannel inventory management solutions give organizations better visibility into their total inventory: the products they have, the condition of the items, and where they’re located.

Inventory management systems also help businesses understand market conditions and preferences in different locations by analyzing turnover and purchase trends. This information can help you develop better marketing strategies and predict future sales.

Finally, an inventory management system built on cloud-based software can sync data from multiple warehouses. Streamline and store your inventory data in your accounting software, reducing the overhead costs associated with managing inventory manually across platforms.

Webgility helps you reap the rewards of inventory management in ecommerce

When it’s time to minimize mistakes and control products, prices, and profits from one central ecommerce inventory management system, Webgility has your back. Webgility’s ecommerce integration with QuickBooks connects all your business platforms. As a result, you can manage inventory, accounting tasks, sales performance, and more from one place.

Webgility can help you track inventory levels by sales channel and automatically bulk-map products and catalogs to each store or marketplace. Instantly update inventory in QuickBooks when you cancel or refund an order. Overall, you can gain confidence in your processes, knowing you’ll never overstock or oversell accidentally.

Webgility makes processes like organizing and tracking items more efficient and accurate. Knowing inventory status in real time can help maintain a structured fulfillment process. Forecast and develop a sustainable, data-driven plan that ensures you can keep up with fluctuating demand and market conditions.


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A previous version of this article was written by Jessica Paulson at SDK Marketing

The Webgility Team

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