Top Inventory Management Strategies To Achieve A Successful eCommerce Business

Inventory Management

Multichannel inventory management solutions play a vital role in attracting more buyers to digital platforms. Users can now browse and purchase a product on their mobile phones, laptops, desktops, tablets, and so on with a few touchpoints. Also, top eCommerce trends like social commerce, BOPIS, and BNPL amongst a few boosts the growth of online shopping models. This boost in the digital commerce ecosystem further increases when retailers meet customers’ demands and fulfill them with quality-centric services within a dedicated time, which further help achieve the implementation of inventory management strategies.

Amazon, the largest online retailer operates more than 175 fulfillment centers to ensure an adequate amount of product stock. It offers its FBA sellers a machine-learning-based inventory management system that helps the platform gain control over its inventory levels.

In this blog, we shall discuss the various aspects of inventory management in an eCommerce business. So, if you are new to online eCommerce business and looking for a professional Magento development company who can assist you with the best solutions, we can help. Now, let’s get started!

What is inventory management?

Inventory management refers to the process of keeping track of all the products that businesses intend to sell to their existing and expected customers. Keeping track of stock includes numerous operations like ordering, storing, outlining, listing, and delivering the inventory items to the customers on time.

Inventory management is a crucial aspect of any supply chain management that helps businesses make reliable and well-informed order decisions. The system enables business owners to identify the quantities of stock in their warehouse or storage facilities that get physically distributed and optimize the entire process of buying and selling commodities.

What are the benefits of inventory management in an eCommerce business?

Inventory management facilitates retailers to automate the business management process while reducing wastage, disruptions, and delays in offering a seamless customer experience. There are many other benefits of inventory management in the eCommerce ecosystem:

Reduce cost

Buying products in bulk and storing them for a long time is detrimental to any eCommerce business. Investing money in a thing that does not bring profit, is a waste of resources. With the help of an effective inventory management system, retailers get a clear picture of their inventory and thus save big on business margins by placing an order for only what they need.

Great inventory visibility

Inventory management strategies enable retailers to get enhanced inventory transparency that offers accurate information about out-of-stock products, emerging sales trends, customer buying behavior, and excess inventory. With a consolidated view of their inventory, merchants can accelerate their supply chain and order fulfillment procedure.

Enhanced productivity

Replacing manual inventory management processes with an automated system saves time and adds to the productivity of the eCommerce business. Some of the major advanced solutions improvise the customer shopping experience and help brands achieve their commerce goals when integrated with efficient eCommerce platforms. Digital commerce platforms like Shopify Plus, SFCC, and Magento support offers customized inventory management systems that can further help organizations to reduce their overhead cost and ensure the economic growth of their online shopping platform.

Enhanced customer satisfaction

Inventory management techniques empower businesses to deliver enhanced customer satisfaction. It helps study the user’s purchasing habits and their requirements. Also, it increases their customer retention rates to build a rapport in the eCommerce world.

Effective supplier and vendor relationships

Inventory management software offers in-depth insights to retailers and merchants with Bonafide data that helps them justify their buying and selling decisions. This crucial information helps merchants leverage the opportunity to negotiate better costs for their products and better deals with the suppliers and costs.

What are the best inventory management strategies for the eCommerce industry?

Enterprises adopt effective methods of inventory management to deliver multi-channel order fulfillment, reduce insufficient stock, optimize shipping and tracking management solution, turnaround time and minimize oversells and undersells. Deploying efficient tools and techniques of inventory management help enterprises meet customers’ demands and run a cost-effective eCommerce business.

Following are the types of inventory management techniques that can help eCommerce businesses to be productive and stay competitive in the market:

Six sigma implementations

Six sigma refers to a teaching methodology that consists of business process improvement tools and strategies. Lean six sigma approach follows DMAIC (Define, Measure, Analyse, Implement, and Control) problem-solving techniques. It also helps businesses reach the root cause of the problems like excess and obsolete inventory write-offs.

Adopt FIFO/LIFO system

Depending on the type of business niche, retailers can implement FIFO (First In, First Out) or LIFO (Lat in, First Out) inventory management system. Generally, inventory for non-perishable items can use the FIFO process, and the LIFO strategy is best suited for products that can get damaged in a recorded time. For instance, food items and packaged goods must follow the LIFO process to avoid wastage. On the other hand, to keep the inventory filled with the latest products, merchants must implement the FIFO method.

ABC analysis

ABC analysis is one of the most-sought inventory management strategies that help retailers categorize their inventory items into three categories – A, B, and C, which means most profitable category, average profit, and least profitable products, respectively. This inventory stock categorization based on the product’s revenue-generating ability helps retailers organize the buying and selling process to avoid delays and disruptions.

Just-in-time inventory management techniques

JIT or Just-in-Time is one of the best inventory management strategies that allows merchants to keep the lowest inventory levels and manage to meet their customer’s demands by refilling the inventory before the last product goes stocked out. JIT helps retailers to place orders and when required, reduce the inventory costs to mitigate the risk of dead stock.


There are many such proven and tested inventory management solutions, which an expert B2B eCommerce website development company can assist you with. If you own an eCommerce business and looking for a professional Magento eCommerce design developer, we are here to help.

Our team ensures the client’s needs are well-understood and take robust steps to fulfill their business goals in a stipulated time. Let’s connect.


What are the popular inventory-management strategies?

  • Just-In-Time (JIT)
  • First In, First Out (FIFO)
  • Last In, First Out (LIFO)
  • Push strategy
  • Pull strategy
  • Conventional manufacturing strategy

What is inventory-management in eCommerce?

Ecommerce inventory-management is all about tracking the location, amount, pricing, and mix of inventory available from your business and multiple online sales channels.

What are the four types of inventory-management?

  • Raw materials
  • Work-in-process
  • Maintenance
  • Repair and operations or MRO
  • Finished goods and products

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