As an ecommerce business owner, you’re likely familiar with the common struggles of managing inventory for your business.
Out of stock issues, excess stock, and other product issues are all too common and can significantly cut into your business’s efficiency and profitability.
If you’ve ever run out of merchandise — or lost money by ordering too much — then you know that having an accurate inventory management system is the key to keeping your stock numbers in check.
Even better, having the right amount of product on hand makes for happier customers without you having to foot the bill for major discrepancies.
Want to maximize your sales while reducing the costs of holding excess inventory? Then you’ll need the right inventory solutions software on your side.
Here’s why having the right system is essential, plus how to choose the best inventory software for your ecommerce business.
What is inventory management software?
Inventory management software is software that’s specifically designed to help you track your inventory — whether in-house or in a 3PL’s warehouse — in order to help you always have the right quantity of products at the right time.
When used effectively, this software can help avoid losing money from unsold products, report on inventory levels and trends in real-time, and offer suggestions for inventory distribution.
Why should I use an inventory management system?
Inventory management software helps automate and streamline the inventory management process by tracking inventory levels, orders, sales, and shipments. It can also help automate inventory tracking, saving time and preventing potential human errors for your business.
Not quite convinced that using inventory management software is the best move for your ecommerce business? Here are some more benefits to consider:
Provide visibility across departments
Inventory management software will help you keep track of inventory in the various departments of your business, typically all within a single dashboard. You’ll be able to see your inventory numbers at a glance and know if you need to scale your product numbers up or down. Implementing this across departments will also help your employees be more efficient when it comes to ordering product and managing resources.
Keep your store in stock
Stockouts can significantly hurt your online sales because your customers won’t be able to order the products they want. To avoid out of stock issues, your chosen inventory management software will help you calculate the ideal amount of inventory you need at any given time.
Get repeat customers
You want your customers to come back and order your products time and time again. Using an inventory management system helps you keep your customers happy by always having the products you need in stock. This increases the likelihood that your happy customers will come back and order more.
Know who needs inventory and when
Experiencing massive business growth is great, but scaling up can bring on a whole slew of issues — one of them being the need to manage multiple channels at once. If you have multiple stores, warehouses, or product lines, you’ll need an inventory management solution that allows you to see which areas need inventory and when — all within a single tool.
Increase inventory turnover ratio
Having a high inventory turnover ratio ensures that your products aren’t becoming obsolete, spoiling before they ship out, or holding up too much capital. The right software will help you calculate how much inventory you sell for a given period and provide insight into how you can make better use of your existing resources.
Having too much inventory can tie up capital (or end up being a waste of money), while not having enough inventory can result in a loss in sales. Inventory tracking software helps you find the sweet spot so that you always have just enough inventory on-hand or in your warehouse. This efficiency will help you save (and make) loads of money through your ecommerce store.
What to look for in inventory management software
Utilizing inventory management software in your ecommerce business will make managing inventory for your online store a breeze. But before doing a Google search for “inventory management software” and purchasing the first tool that comes up, we recommend you make sure your chosen tool includes all of the features below:
If you are monitoring your inventory manually, you’ll probably come to realize a problem after it’s too late. Sales can happen quickly, so you’ll need a tool that will track inventory in real-time. Your chosen software should be able to analyze the data to optimize fulfillment, eliminate stockouts, and prevent excess inventory. Just in time (JIT) inventory management may not always be possible, so real-time is your next best solution.
Inventory trends and future forecasting
Smart inventory management software is able to analyze past selling trends and adjust your inventory accordingly. For example, if you routinely face out of stock issues around the holidays, your software will ensure that you have more inventory available during this time period. It should also be able to make future projections about how much product you need and when.
Ability to set reorder points
You don’t want to wait until you run out of inventory before ordering more, because it can take days or weeks to acquire more product. Your chosen software should allow you to set reorder points to give you a bit of a “buffer zone,” ensuring that you automatically reorder product before you run out.
Easy to use
What’s the point in opting for a new tool it makes your life more difficult? To reduce stress when it comes to managing your inventory, choose software that has been reviewed as customer-friendly and easy to use. You can typically find this information by searching for information online or by signing up for a trial.
The top inventory management software
The hunt for the right inventory management software for your business can be tedious. While free trials are available, you don’t want to be roped into paying for a tool you don’t like. Fortunately, we have done the hard work for you by ranking the best inventory software on the market!
TradeGecko is an inventory management system that allows you to “take control of your ecommerce products, orders, customers, and insights all in one place.” You can track the products you sell, organize your customer data, make projections about future sales, and sync orders from multiple channels. TradeGecko is also compatible wide a wide range of ecommerce tools and apps.
Skubana powers orders, inventory, and business intelligence for high-volume brands and retailers. Wherever you sell and however you fulfill, Skubana acts as the central nervous system of your operations, unifying all the tools you need to run your business, automating repetitive tasks, and helping with profitability, forecasting, and demand planning.
Ensure that the products you need are in stock at the right time and in the right place with SAP. SAP offers inventory management software for ecommerce businesses looking to save money by reducing excess inventory and freeing up working capital.
Keep track of every unit and maximize your sales with Zoho. Zoho is a favorite of ecommerce business owners due to their easy-to-use platform, outstanding customer service, end-to-end inventory tracking, and additional CRM integrations. Zoho is a great option if you are looking for additional marketing and accounting tools.
SYSPRO recognizes that a lot of your working capital can be tied up in inventory. Even worse, products can go bad or become outdated, meaning that money went to waste. Don’t let this happen to you. Reduce the problem of excess inventory, prevent interruptions to production, and achieve optimal levels of inventory with SYSPRO.
6. Stitch Labs
Stitch Labs is designed for growing brands that need technology to scale with them. Their operations management solution is designed for fast-moving operations teams that want to sell flexibly on multiple channels, offer reliable shipping through advanced automation, merchandise creatively with bundles, pre-orders, loyalty programs, and more.
At the risk of being self-serving, we had to include ShipBob on this list of the top inventory software solutions. Even though we are a third-party logistics (3PL) company, we have proprietary inventory management software you can use on top of our fulfillment services.
ShipBob comes in at #1 because we handle ALL of your inventory management and retail fulfillment needs in one place, although we also work with other inventory management partners that can handle additional needs of our customers.
Why use a 3PL for inventory management?
What makes ShipBob the best inventory management software? The fact that we’re a 3PL that provides inventory management software, meaning the technology you use also powers our network of fulfillment centers.
As you scale your ecommerce business, you’ll realize that fulfilling orders in-house becomes more of a logistical nightmare. By outsourcing fulfillment to a 3PL company, you can fully expand your fulfillment strategy while reducing the costs of excess inventory.
ShipBob is able to address all of your inventory management and fulfillment needs. Here’s why using a 3PL for inventory tracking outshines all other solutions:
Full order fulfillment
Have you ever ordered a product online, just to have a less-than-stellar delivery experience? If your order was delayed, lost, or damaged, this was likely due to order fulfillment issues.
Going with a 3PL company will help you prevent these problems in your business by managing fulfillment from start to finish. For instance, ShipBob handles all the receiving, processing, packing, and shipping of online orders to your customers — a process that’s completely hands-off for you!
Many ecommerce sellers need warehousing space that is cost-effective for them. Working with a 3PL makes it easy to order more inventory when you need it and also expand into additional fulfillment centers as you grow.
ShipBob is designed to help you turn over your inventory quickly by offering inventory storage space in pallets, shelves, and bins for your business. Going the 3PL route saves you time and money, and prevents unnecessary delivery delays.
Knowledge is power. The more accurate data you have, the easier it will be to make informed decisions about your business. A data-driven 3PL company should be able to help you with demand forecasting, reorder points, and more to help your business run more efficiently.
All data is one place
The best inventory management solution will cary business to business, but a 3PL can be an all-in-one tool that’s more cost-effective than utilizing multiple tools at once, and is more efficient than trying to sync up disparate systems and manage all the steps of fulfillment process on your own. It’ll have your inventory system running like clockwork.
Automate fulfillment for faster, easier shipping
Packaging up your products and manually shipping out orders is exhausting. A 3PL takes all of this off your hands by managing the packing, packing, shipping, and tracking of your orders for you. That means your customers will get their orders faster and you’ll be able to relax knowing that your inventory management is in good hands.
Inventory management FAQs
Have more questions about why you need inventory management software, how it works, and where to find the best solution for you? If so, check out some frequently asked questions section below:
When should I set my reorder point?
Avoid running out of inventory by setting reorder points ahead of time. You can follow the formula (Lead Time Demand + Safety Stock = Reorder Point) to calculate the inventory amount you will need to set your reorder points. Read this article to get more information.
How much inventory should I order?
Determining the right amount of inventory at the SKU level will vary depending on your available warehouse space, past demand, manufacturer leads times, upcoming promotions, and other variables. Read this article on inventory forecasting to learn more.
What do I do during holiday seasons/high order times?
Black Friday, Christmas, and other holidays can amp up your sales. Holiday inventory preparation means calculating how much inventory you need ahead of time. ShipBob does the hard work for you by analyzing trends (and your past sales) to determine how much inventory you need on-hand during high order times. Maximize sales without wasting money on excess inventory.
See how different direct-to-consumer businesses, including those that are very seasonal in nature manage their inventory here.
Can I use multiple ShipBob warehouses?
Yes! ShipBob is a 3PL company that owns and operates multiple fulfillment centers within the continental US. This allows us to offer two-day shipping at ground prices across the country. This also means that we help reduce the distance packages have to travel, cutting down on transit time and shipping costs.
Avoid the common headaches that come with managing your ecommerce inventory. With the right inventory management software, you’ll save money on fulfillment, prevent out of stock issues, avoid ordering excess stock, and effectively plan ahead for future sales.
All of these benefits relieve your stress as a business owner and keep your customers happy. Experience this for yourself with ShipBob. Learn more about how ShipBob helps with inventory management and get a pricing quote.