{"id":4405,"date":"2023-01-13T19:58:05","date_gmt":"2023-01-13T19:58:05","guid":{"rendered":"https:\/\/www.shipbob.com\/uk\/blog\/inventory-flow\/"},"modified":"2026-04-20T20:49:13","modified_gmt":"2026-04-20T20:49:13","slug":"inventory-flow","status":"publish","type":"blog","link":"https:\/\/www.shipbob.com\/uk\/blog\/inventory-flow\/","title":{"rendered":"Understanding Inventory Flow in Ecommerce"},"content":{"rendered":"\n

Table of Contents<\/p>

** Minutes<\/p><\/div><\/div>\n

What is inventory flow?<\/a><\/p>\n\n\n\n

Why is inventory flow important?<\/a><\/p>\n\n\n\n

How to ensure smooth inventory flow<\/a><\/p>\n\n\n\n

Inventory flow challenges<\/a><\/p>\n\n\n\n

How to optimise inventory flow with software<\/a><\/p>\n\n\n\n

Level up your inventory flow with ShipBob\u2019s inventory management<\/a><\/p>\n\n\n\n

Inventory flow FAQs<\/a><\/p>\n<\/div>\n\n\n\n

Moving inventory<\/a> through the supply chain is a must for a lot ecommerce businesses \u2014 but how you move it is just as important. <\/p>\n\n\n\n

The flow of inventory through your supply chain can hugely impact your business\u2019 costs, speed, and overall efficiency. For optimal performance, inventory should flow seamlessly from one stage of your supply chain to the next. <\/p>\n\n\n\n

This is easier said than done, though. To optimise your inventory flow, you\u2019ll need to take a close look at your inventory management<\/a> process, as well as your methods of tracking, forecasting, and restocking inventory. <\/p>\n\n\n\n

In this article, we\u2019ll define what inventory flow is, break down why it\u2019s important, and discuss different strategies for honing your inventory flow through techniques, software, and the help of 3PL<\/a> partners like ShipBob.   <\/p>\n\n\n\n

What is inventory flow?<\/h2>\n\n\n\n

Inventory flow refers to how a business controls and manages the movement of products through its supply chain<\/a>. It involves creating a system or set of procedures that are followed to make sure that inventory is physically moved to the next supply chain stage. <\/p>\n\n\n\n

When inventory flow is smooth, inventory moves from stage to stage easily and efficiently, without delays or mistakes.    <\/p>\n\n\n\n

Where does inventory flow fit in inventory management?<\/h3>\n\n\n\n

Inventory management is a multifaceted process that encompasses all sorts of tasks, including sourcing and procurement, inventory storage<\/a>, stock level monitoring, replenishment<\/a>, inventory auditing, and more. <\/p>\n\n\n\n

Inventory flow not only ensures that these functions happen, but that they happen smoothly. Good flow of inventory prevents bottlenecks that grind the supply chain to a halt, and helps a business execute tasks quickly and efficiently for better results.  <\/p>\n\n\n\n

For example, one of the key functions of inventory management is to make sure there\u2019s sufficient finished goods inventory<\/a> in stock to meet customer demand. <\/p>\n\n\n\n

With a good inventory flow strategy in place, you can watch inventory levels and time restocking correctly, avoiding stockouts<\/a> that delay operations further down the supply chain (and disappoint customers). <\/p>\n\n\n\n

Generally, businesses focus on optimising inventory flow in and between the following phases:<\/p>\n\n\n\n

Purchasing and procurement<\/h4>\n\n\n\n

The flow of inventory begins when you purchase raw materials for production or procure goods for reselling. Since every subsequent supply chain function builds on this one, it\u2019s crucial to work with reliable suppliers who can deliver high-quality goods efficiently and at the best price.<\/p>\n\n\n\n

Storage<\/h4>\n\n\n\n

Once inventory is received in the warehouse<\/a>, businesses will need to store it strategically to ensure picking efficiency. When inventory is stored using an organised system, it significantly cuts down the time to find and retrieve products for fulfilment or raw materials for production.<\/p>\n\n\n\n

Fulfilment<\/h4>\n\n\n\n

As soon as orders are placed, warehouse staff will have to find and retrieve the products from their assigned storage space. They will then have to transport them across the warehouse to the packing station, where they will be prepared for shipping. Optimising these steps and leveraging automation can improve efficiency and picking accuracy.<\/p>\n\n\n\n

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\u201cThe amount of volume ShipBob is doing for us is really impressive \u2013 almost 5,000 orders in a day, and we know they have capacity to do much more and scale with us as we continue to grow. <\/p>\n\n\n\n

At this point in time, we have no intention of setting up and managing our own warehouses, so using ShipBob for fulfilment with customisation, control, and visibility, while managing our volumes is key.\u201d<\/p>\n\n\n\n

Stephanie Lee, COO at PetLab<\/a><\/em><\/p>\n<\/blockquote>\n\n\n\n

Why is inventory flow important?<\/h2>\n\n\n\n

A good inventory flow ensures that your ecommerce operations function seamlessly with minimal delays and disruptions. It also benefits your business in several key ways that improve overall performance and help boost your bottom line. <\/p>\n\n\n\n

Warehouse efficiency<\/h3>\n\n\n\n

The inventory flow inside a warehouse is directed by a warehouse control system<\/a>, which helps to coordinate activities between different subsystems. That way, conveyors, carousels, and sorters can function seamlessly and in a coordinated manner. <\/p>\n\n\n\n

The better inventory flow is, the more efficient warehouse management<\/a> can be, since product routes are optimised and warehousing workflows are all functioning smoothly.<\/p>\n\n\n\n

Reduced labour costs<\/h3>\n\n\n\n

When inventory flow is good and a warehouse runs like a well-oiled machine, it takes less time to perform tasks \u2014 especially if you automate more menial or repetitive functions. In this way, proper inventory flow helps reduce labour costs, as warehouse staff is free to focus on tasks that require a human touch. <\/p>\n\n\n\n

Consistent inventory forecasting<\/h3>\n\n\n\n

When inventory flow is smooth and traceable, you can always have an accurate idea of your stock levels in real time. There\u2019s predictability in the movement of inventory, which also makes it easy to consistently forecast your future inventory needs<\/a>.<\/p>\n\n\n\n

How to ensure smooth inventory flow<\/h2>\n\n\n\n

Businesses need a system for tracking and analising stock movement so they can ensure smooth inventory flow. The following techniques can help you to monitor, manage, and maintain a seamless inventory flow across your supply chain. <\/p>\n\n\n\n

Stock review<\/h3>\n\n\n\n

It\u2019s important to review your stock regularly to check stock levels and stock availability<\/a>. This evaluation process can also help you calculate which SKUs have the highest turnover, and forecast demand for the next period<\/a>. <\/p>\n\n\n\n

Using this information, you can set reorder points correctly and replenish your stock on time to ensure inventory flow stays seamless.<\/p>\n\n\n\n

ABC analysis<\/h3>\n\n\n\n

Categorizing your inventory using the ABC analysis method is a great way to regulate inventory usage<\/a> and maintain sufficient buffer stock to tide you over in case of sudden demand spikes. <\/p>\n\n\n\n

In ABC analysis, a business separates its inventory into three groups: A\u2019s, B\u2019s, and C\u2019s. <\/p>\n\n\n

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