Top Features and Benefits of Ecommerce Inventory Management Software

Optimal inventory is the key to success in the ecommerce space. It covers everything from keeping the right product listings to creating a system that lets e-store owners expedite their deliveries. However, this will depend on how well ecommerce businesses procure, record, manage, move, and restock their inventory. This becomes more complicated when the inventory is voluminous or there are numerous product variants and categories. Manual inventory management is not a prudent way to deal with such inventory requirements. This is where inventory management software for ecommerce can help e-store owners or ecommerce sellers in perfecting their inventory game.

The eCommerce inventory management software has A to Z capabilities for stock management ensuring optimal stock levels, timely shipping, no spoilage, no stockout issues, and real-time updates in inventory after every sale or return. Inventory management software for ecommerce is the ultimate stock planner that will help ecommerce businesses keep trending stocks in their product catalogs while eliminating outdated ones.

This post details the key functions, top features, integrations, and benefits of inventory management for ecommerce with an advanced software system.

5 Key Functional Levers of Inventory Management for Online Stores

The eCommerce business revenue globally will increase at a whopping rate of 9.49% between 2024 and 2029. While the growth seems promising, it also raises concerns about how online businesses are going to manage the vast inventory requirements and what will be their strategy for robust inventory management.With the rapid growth of eCommerce, businesses must leverage key functional levers to optimize their inventory processes.

Here are five essential strategies for managing inventory in online stores.

Inventory Control

E-commerce Inventory control is a key function lever of inventory management for eCommerce. It means –keeping just the right amount of stock to avoid having too much or running out. It covers setting up when to order more, managing backup stock, and making sure the count is correct. For instance, an online shop that sells electronics uses inventory control to decide when to reorder popular items like smartphones. When the stock drops to a certain level, the system automatically places an order to fill up the stock again ensuring they always have enough of the popular products.

Inventory Visibility and Synchronization

Keeping an eye on and tracking stock in real-time across different e-marketplaces or e-store(s). It makes sure accurate stock info is always on hand. For instance, if you are an online clothing store that sells the same items on multiple e-stores or e-commerce marketplaces then you need to keep a tab on inventory across all sites. When someone buys an item on one online store the inventory system must update it right away on all sites to stop double booking of the same item. to show the change, which stops them from overselling online.

Inventory Analytics

Analyzing stock data, sales trends, customer reviews, and other data for smarter insights that improve decision-making. With key metrics, you can make decisions regarding inventory stocking, catalog improvement, adding/removing products, improving product descriptions and metas, announcing promotions, etc. For instance, an online store selling homewares or home decor items uses stock analysis to spot items that aren't selling well. By looking at sales info, they can choose to run sales or markdowns on these products to clear out extra stock and open up space in their warehouse.

Inventory Life Cycle Management

From sourcing inventory, listing it on online platforms for selling purposes, selling and delivering it to managing its returns or expiries–all these are part of inventory life cycle management. Inventory management software for ecommerce must-have features that ensure the inventory gets handled well throughout its existence, including dealing with returns and damaged goods.

Inventory Supply Management

This zeroes in on keeping good ties with suppliers and making sure the supply chain runs smoothly. It includes supplier negotiations, contracts, supplier analytics, supplier relationships, and diversification. Advanced inventory software for ecommerce lets online sellers map their products to particular suppliers for easy sourcing.

Effective e-commerce inventory management requires both key functional levers and the use of advanced software solutions like eCommerce inventory management software. These systems optimize operations through features like product variant tracking, inventory sync, supplier management, etc. The best inventory management solutions for e-commerce also come with modules, integrations, add-ons, etc. for improved functionalities.

Let's understand what are the prominent features of Ecommerce inventory management tools.

Top Features to look for in E-commerce Inventory Management Software

Product Variant Management

The feature product variant management lets online stores handle different versions of products, like color, size, type, or material. This makes sure each variant has its tracking giving its precise stock levels and sales info. It makes adding new variants and updating existing ones easier. It also helps in organizing the inventory.

Product Category Management

The product category management feature helps e-commerce sellers sort products into groups for easier browsing and searching on an online store. This feature is important for ecommerce sellers who have various categories. For instance: Garment category: Subcategory: Men, Women, Kids, and further categories like Party wear, Formals, etc. This feature lets businesses create, change, and remove categories making sure products are in logical groups. It makes shopping better by making products easier to find.

Brand-wise Product Management

Brand-wise product management lets online stores sort and handle products by brand. On e-commerce websites, this will sort products and show them to shoppers brand-wise. This feature makes it easy to keep tabs on brand-specific stock levels, sales results, and deals.

Product Images and Images Alt Descriptions

This feature of Inventory management software for ecommerce lets online stores upload and manage product images along with their alt descriptions. Good-quality images and clear alt texts make products look better and help with SEO.

Inventory Sync with Physical Stores

Many ecommerce sellers also have physical stores and this is a life-saver feature for them. Inventory Sync with brick-and-mortar stores keeps stock levels consistent between online and offline shops. This tool stops businesses from selling more than they have or running out of stock by updating inventory data in real time.

Barcode Generator

The Barcode Generator function comes with advanced ecommerce inventory management systems. It lets online stores create unique barcodes (various print sizes and types) for their items. Barcodes make it easier to keep track of inventory, manage stock levels, and handle orders.

Label Generator

The Label Generator is an embedded tool in inventory software for online stores that lets ecommerce stores create and print tags for their items. Tags can show key details like product name, SKU, price, and barcode. This tool helps to organize and find products particularly in a warehouse or during transit.

Shelf-life Management

Shelf-life Management is key for online shops selling perishable goods or FMCG products that have the best before dates. This feature tracks when products are approaching expiry and sends timely alerts. Online sellers can make sure older stock sells first. It helps to cut down on waste, keep product quality high, and follow rules and laws. Selling expired stocks can be a blunder. For instance, Zepto had to face customer anger as its quick commerce platform delivered a 10 Kg Wheat flour packet that was approaching expiry in 8 days. Inventory management software with an expiry management feature can prevent expiry-related incidents like the one that happened with Zepto.

Warehouse Management

The Warehouse Management module in inventory management software helps ecommerce businesses smoothen their godown operations. Features include storage tracking, layout optimization, and shipping. The software helps track product locations

Stock Notifications

Stock Notifications give ecommerce businesses a heads-up when their inventory hits certain levels/thresholds. Alerts also come for stock performance hits. This feature helps stop items from running out or piling up by sending alerts at the right time to order more or cut back on stock. It makes sure online businesses can keep just the right amount of stuff on hand.

Order Management

Order Management takes care of an order's whole journey, from when it's placed to when it's delivered. This part includes tools to process orders, handle returns, payment info, and keep tabs on shipments. The feature ensures orders are filled giving customers a hassle-free shopping experience and cutting down on business costs.

Supplier Management

Supplier Management helps online stores to improve their ties with suppliers. This feature helps online store owners keep their supply chain uninterrupted with superb product-supplier mapping supplier contracts documentation, supplier analytics, and more. It eases procurement and helps ecommerce businesses in timely refilling their stocks.

Low and Negative Stock Management

Low and negative stock management helps online stores monitor and deal with low or negative stock levels. This feature sends out warnings and creates reports about products that are running low or out of stock, allowing quick action to restock. It stops overselling and running out of items.

Bulk Update

The Bulk update feature lets online stores make bulk changes to their inventory info all at once. This covers updating prices, stock numbers, product details, and more. It saves time involved in individual stock updates.

Stock Metas

Stock Metas adds extra details to inventory items. For online sales on ecommerce marketplaces like Amazon, metas (product tags, meta description) are key SEO factors. This feature helps manage tricky SEO requirements for improved rankings.

Multi-channel Sales Handling

Multi-channel sales handling lets online businesses keep track of stock across different sales spots, including all web stores, marketplaces, and social media-integrated online sales channels. This feature keeps stock levels in sync across all channels and presents a complete picture of inventory from all sales touchpoints.

Dark Store Management

Dark Store Management is built for online shops that run dark stores (Stores for online deliveries only). For instance, Amazon-backed Whole Foods opened its dark store just to fulfill online orders. The dark store management feature aids in managing dark store stocks, order processing, and deliveries.

Inventory Automation

Inventory automation means eliminating manual work from various inventory management tasks including reordering, stock adjustments, and reporting. This boosts accuracy, reduces manual work, and saves labor costs. It also expedites all inventory-related processes that if handled manually will take a lot of time.

Ecommerce Inventory Reporting System

A standard ecommerce inventory management software can generate the below reports:

Stock Performance Reports: Inventory performance reports evaluate an eCommerce business’s inventory management effectiveness. They track key metrics like inventory turnover, order fulfillment rates, and stockout frequency. These reports help businesses assess their inventory strategies and identify improvement opportunities.

Inventory Cost Analysis Reports: Inventory cost analysis reports examine inventory-related expenses, including holding, ordering, and stockout costs. These reports are essential for understanding total inventory costs and making informed financial decisions. The insights help businesses optimize their inventory expenses and improve profitability.

Item Serial and Batch Reports: Item serial and batch reports track inventory using serial numbers and batch codes, essential for monitoring electronics, drugs, and high-value items. Key data includes serial numbers, batch codes, manufacturing dates, expiry dates, and location, helping with recalls, compliance, and warranty tracking.

Inventory Valuation Reports: These reports determine stock worth using FIFO, LIFO, or weighted average methods. They track COGS, ending inventory value, and turnover rates. It helps businesses assess financial health and make purchasing decisions.

Loss Quantity Reports: These reports monitor inventory losses from theft, damage, or discrepancies. They measure loss amounts, missing inventory value, and loss reasons to improve security, training, and control processes.

Demand Forecasting Reports: These reports use sales history, market trends, and seasonal patterns to predict future inventory needs. They track predicted demand, sales data, lead times, and seasonality to optimize purchasing and prevent stockouts.

Stock Aging Reports: These reports analyze inventory age to identify slow-moving stock. They measure inventory age, sales velocity, and aged stock value to guide discount decisions and inventory write-offs.

ABC Analysis Reports: These reports classify inventory into three groups: Class A (high value, low quantity), Class B (medium value and quantity), and Class C (low value, high quantity). They measure item value, quantity, and sales contribution to help focus management efforts.

Supplier-wise Product Reports: Supplier-wise product reports detail inventory items from suppliers, helping assess performance and manage relationships. Key metrics include supplier details, products, lead times, and purchase history, enabling better negotiations and procurement.

Product-wise Sales Reports: These reports analyze product sales performance over time, guiding inventory decisions. They track product details, sales volumes, revenue, and margins to identify top sellers and plan stock levels.

Combined Inventory Reports: These reports overview inventory across locations, enabling consistent stock management. They track total value, location-wise levels, and turnover rates to guide distribution and restocking decisions.

Stock Adjustment Reports: These reports monitor inventory changes from returns, repairs, or transfers, maintaining accuracy. They track adjustment reasons, quantities, and values to reduce errors and improve management.

Stock Transfer Reports: These reports track inventory movement between locations, ensuring product availability. They monitor origin, destination, quantity, and timing to optimize shipping and inventory control.

Stock Verification Reports: These reports document physical count results, verifying record accuracy. They track counted quantities and discrepancies to improve accuracy and compliance.

Overstock Reports: These reports identify excess inventory items, and manage storage costs. They monitor overstock quantities, values, and duration to guide reduction strategies.

Understock Reports: Understock reports show items with low stock levels, helping prevent stockouts and maintain availability. They analyze understocked quantities, values, and potential revenue loss to guide ordering decisions.

Dead Stock Report: Deadstock reports identify non-moving items to manage aging inventory and reduce storage costs. They track dead stock quantity, value, and age to inform liquidation or repurposing decisions.

Inventory Turnover Reports: These reports measure inventory sales and restocking speed, evaluating efficiency. Key metrics include turnover ratio, DSI, and COGS to optimize stock management.

Safety Stock Reports: These reports determine the buffer inventory needed to prevent stockouts from demand or supply fluctuations. They track safety levels, lead times, and demand variations to strengthen supply chains.

Reorder Point Reports:These reports determine optimal levels for new orders, maintaining availability. They monitor reorder points, lead times, and demand to enable automated ordering.

Inventory Accuracy Reports: These reports compare physical counts with records to identify discrepancies. They track accuracy rates and variances to improve control.

Inventory Movement Reports: These reports monitor warehouse inventory flow, including receiving through shipping. They measure movement volumes, types, and durations to optimize operations.

Popular Integrations for Ecommerce Inventory Software

Below are the top integrations that add more functionality to the inventory management for ecommerce businesses. These add-ons will make the inventory system a single destination for all operational needs of e-store owners.

Learn more about inventory management with our ultimate guide to inventory management.

Benefits of using inventory management software for e-commerce businesses

Better Inventory Planning

Inventory software gives key insights into sales trends, product performance, and stock amounts. This data-driven approach helps businesses make smart choices about inventory, restocking, and marketing efforts.

Cost Savings

Proper inventory management reduces storage costs by ensuring that businesses only store the necessary amount of inventory. This saves money on storage fees, handling, transportation, and insurance. For example, Amazon FBA helps reduce shipping costs by up to 70% compared to other fulfillment services.

Reduction in human errors

Automated inventory systems can start product reorders when supplies run low, to keep items in stock. This automation cuts down on manual work and reduces human mistakes in tracking inventory.

Faster Order Processing

Inventory management for ecommerce using advanced software streamlines order processing, tracking, and fulfillment, reducing the risk of errors and delays. This ensures that customers' online orders are processed swiftly, accurately, and delivered on time.

Better Management of Seasonal Fluctuations in Demand

Inventory management systems can adjust stock levels based on seasonal trends and promotional activities. Inventory systems can change stock levels based on season patterns and sales events making sure there's enough product when demand is high.

Precise Stock Prediction

Online inventory management systems enable e-commerce companies to predict stock requirements accurately by monitoring storage capacity and product movement. This enables organizations to effectively address demand fluctuations, minimizing both stock shortages and excess inventory.

Smarter Warehouse Handling

New inventory systems make warehouses more organized and efficient. This cuts down on worker costs and speeds up order handling. For instance, Amazon's inventory systems that are integrated with AI/ML tech use these technologies to improve how they store and restock items.

Real-time visibility of overall inventory

Real-time inventory tracking for online stores helps businesses monitor stock across multiple e-store channels, e-marketplaces, and warehouse locations. This results in accurate and up-to-date information that prevents stockouts and overstocking.

Best Practices for Inventory Management for Ecommerce Businesses

Implementing best practices can further enhance the efficiency of inventory management in e-commerce:

Drop Shipping: Drop shipping means retailers can fulfill orders directly from the supplier, reducing the need for large inventory holdings and minimizing storage costs.

Utilizing Multiple Warehouses: Using multiple warehouses strategically located can reduce shipping times and costs. This will ultimately improve customer satisfaction.

Wave Picking: Wave picking is a method of organizing order picking to reduce travel time and increase efficiency in the warehouse.

Integrating with Third-Party Systems: Integrating inventory management systems with third-party logistics providers and other systems can streamline operations and provide real-time visibility into inventory levels.

Investing in eCommerce Inventory Management Software: eCommerce software for inventory management offers real-time data access, scalability, and automation, making it easier to manage inventory efficiently.

Establishing Return Management SOPs: Standard Operating Procedures (SOPs) for returns help manage returned inventory efficiently, reducing losses and improving customer satisfaction.

Utilizing Inventory Forecasting: Accurate inventory forecasting helps predict demand, reducing the risk of overstocking or stockouts and optimizing inventory levels.

Wrapping Up

Effective stock management is crucial to an e-commerce business's success. It helps cut down on wasted resources, time, and materials while boosting productivity and income. By using better inventory control methods, companies can reduce waste in how they use their workforce, manage time, and run operations. These methods also protect stock from theft going bad, expiring, and slow transfers from warehouses to stores.

X-Byte Enterprise Solutions delivers comprehensive eCommerce software development solutions customized for inventory management workflows. With our expertise, you can achieve seamless integration, real-time visibility, and automated operations, positioning your online business for success in today's dynamic e-commerce market.

Reach out to X-Byte Enterprise Solutions now to discover how we can elevate your inventory management and accelerate your business expansion.

Frequently Asked Questions