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It’s something that becomes more and more complex as businesses expand into more channels and sales grow, which means there’s more to analyze and track. With just-in-time management, firms can improve cash flow (as less storage space is needed), reduce excess stock, and cut inventory holding costs. Firms which adopt just-in-time methods must make sure they have accurate demand forecasts and a thorough understanding of customers’ purchasing habits. It’s far more accurate, giving you real-time visibility of inventory across multiple locations.

Once you start selling thousands of orders each month, you will be turning over inventory quickly and likely expand into new locations and stores. Not only does it affect you (and your financials), but it also involves several other stakeholders, from customers to suppliers. Failing to differentiate between products stored with you and those in the supplier’s hands could lead to late deliveries, missed sales, and poor inventory accounting. To begin tracking and managing inventory, you’ll need to get an official count of your current stock. You can use any method you want to get this number—for instance, taking a physical inventory count, a bar code scanner, or RFIDs. If you use Shopify for your business, you can navigate to your Inventory page to view your inventory, adjust your inventory levels, and set up inventory tracking.

What does inventory tracking mean?

Some choose to conduct these audits a few times a day, others choose a few times a week depending on the type, quantity, and value of stock they hold. Businesses with less inventory of smaller value may audit at longer intervals, and those with more quantities that are worth more may audit more frequently. The actual audit consists of recording the location and quantity of inventory you have stored for each SKU and the movement of stock (inflow and outflow). This data is then compared with the data collected from previous audits and further evaluated. Inventory tracking is an indispensable part of your ecommerce operations and has the potential to make or break your success in the long-term. But when you partner with a capable and qualified inventory management system, there’s really nothing your company can’t achieve—and Extensiv’s order management platform is definitely that kind of system.

• As customers make purchases on the website, inventory levels fluctuate accordingly.
• We’ve done the work, looking at all the software options out there so you can choose which is best for your business.
• Active RFID tags, however, are more durable than barcodes because an RFID scanner doesn’t need a direct line of sight to the tag.
• ShipBob has fulfillment centers in some of the largest cities and regions across the United States and lets ecommerce merchants store inventory in multiple locations.
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We run through detailed instructions on how to do this via manual spreadsheets (and provide a free template), as well as when to start looking at an automated system. The good news is there are a couple of free inventory software options on the market. Every business is different, so we recommend getting started with our overview of what inventory management is (and how it can help your business). From there, you can see what you need—ecommerce what is inventory tracking options, a QuickBooks integration, or warehouse management —and use our reviews as a guide. With the right inventory management process, you can be on your way to prioritizing the customer and staying ahead of the competition, while ensuring your business has the right tools to succeed. Perform regular physical counts of inventory to verify accuracy and identify discrepancies between recorded and actual stock levels.

What are the best ways to manage inventory?

Any ecommerce company can have the best marketing campaign in history but will fall flat with consumers if they fail to live up to their shipping expectations. In order to meet customer expectations around deliveries, ShipBob helps merchants set the proper inventory and retail fulfillment strategy in place. Most 3PL companies today provide sophisticated software that lets you digitally review your entire inventory from the comfort of your own home.

Accurately tracking your inventory can significantly increase your efficiency and help you keep up with customer demand. You’ll enjoy multiple benefits from using barcodes to track inventory, starting with perpetual inventory counts instead of a periodic inventory system. You’ll also have more data for inventory control processes such as setting safety stock levels, calculating reorder points, and determining economic order quantity (EOQ). Inventory management software is a supply chain management tool that helps you track inventory levels, forecast demand and place orders based on current levels. The best inventory management software will depend on your specific business needs but is something everyone should consider using since it helps increase efficiencies and reduce costs.